The Commerce Commission has received an application from Northland-based Top Energy Limited for exemption from the Electricity Industry Reform Act (EIR Act).

Commissioner Dr Kate Brown said that the application is for an exemption for Top Energy to continue its involvement in the Ngawha Power Station.

Top Energy is an electricity lines business operating in the area covered approximately by the Far North District Council. It is also a joint venture partner with Tai Tokerau in the Ngawha Power Station, which generates 8mW of electricity.

The EIR Act was passed last year and gives companies involved in electricity markets until April 1 this year to put in place corporate separation of their electricity generation and trading businesses from their lines businesses or to have obtained an exemption from the Commission.

Dr Brown said that the Commission has not yet estimated the date by which it expects to make its decision.

In previous EIR Act decisions, the Commission has granted exemptions to Alpine Energy Limited and Carter Holt Harvey Limited. It has declined exemptions to Central Electric Limited and Auckland International Airport Limited. It has on hand applications from Transpower New Zealand Limited and Trans Tasman Properties Limited.

In considering an exemption, the Commission must answer three questions:

  1. Would the exemption inhibit competition?
  2. Would the exemption allow cross-subsidisation between electricity generation and lines businesses?
  3. Would the exemption create a relationship between electricity lines and supply businesses, which is not at arms length?

"The presumption must be that if the answer to any of these questions is 'yes', the Commission must not grant an exemption from the EIR Act," Dr Brown said.

Details of how the Commission applies the EIR Act are available from its Wellington office and its website. They have been published as Practice Note 3 and the October 1998 issue of the newsletter Compliance.

Media contact: Commerce Act Manager Geoff Thorn

Phone work (04) 498 0958

Communications Officer Vincent Cholewa

Phone work (04) 498 0920

Commission media releases can be viewed on its web site www.comcom.govt.nz