Transpower seeks exemption from Electricity Industry Reform Act
Published01 Mar 1999
The Commerce Commission has received an application from Transpower New Zealand Limited for exemption from the Electricity Industry Reform Act (EIR Act).
Commissioner Dr Kate Brown said that the application is for an exemption for Transpower to continue its involvement in the Marketplace Company Limited (M-co) until October 1.
Transpower owns and operates the national grid, and has a shareholding in M-co. M-co administers and operates the wholesale electricity market.
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 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.
