First exemption for individual: Commission exempts Joan Withers from the Electricity Industry Reform Act
Published17 Apr 2000
The Commerce Commission has granted its first Electricity Industry Reform Act exemption to an individual Ms Joan Withers has been exempted from the cross-ownership rules of the Act.
Ms Withers had applied to the Commission for exemption to allow her to continue to act as a director of both Auckland International Airport Limited (AIAL) and Meridian Energy Limited.
AIAL is an electricity lines business under the Act because of the size of its electricity network at the airport. Meridian is an electricity supply business. The Act prevents persons from simultaneously being a director of both kinds of business. That would mean that Ms Withers had a cross-involvement with an electricity lines and electricity supply business, which is prohibited by the Act.
Commission Member Paula Rebstock said that the Commission granted the exemption on the grounds that, there continued to be no business relationship between AIAL and Meridian, an exemption would not in any material way:
provide Ms Withers with incentives or opportunities to inhibit competition in the electricity industry;
provide Ms Withers with incentives or opportunities to cross-subsidise Meridian Energy's electricity generators from Auckland International Airport's electricity lines business; or
allow a relationship between Auckland International Airport's electricity lines business and Meridian Energy' electricity supply business which would not be at arms length.
The Commission considered that permitting Ms Withers to retain her involvements in both an electricity line and supply business would not defeat the purposes of the Electricity Industry Reform Act provided there was no business relationship between the two companies.
The Commission made it a condition of the exemption that Meridian not supply electricity to consumers connected to AIAL electricity distribution network through a use of system agreement, while Ms Withers remains a director of both companies.
Copies of:
Decision Number 384, Ms Joan Withers; and
Practice Note 3: Electricity Industry Reform Act 1998, Commission's Role, Processes and Procedures
are available from reception at the Commission's Wellington office, Level 7, Landcorp House, 101 Lambton Quay.
