Draft Determination On EGBL Application

Issued 26 April 2002/043

Commerce Commission Releases Draft Determination On EGBL Authorisation Application

The Commerce Commission has today released a draft determination in relation to an application by the Electricity Governance Board Limited (EGBL) for authorisation of an arrangement that proposes to restructure the basis under which electricity is traded.

The arrangement would involve combining three existing market arrangements into a single rulebook, and implementing various supporting agreements.

The Commerce Act prohibits competitors agreeing to work together in a way that reduces competition between them. However, the Act does allow for authorisation of potentially anti-competitive business practices if the public benefit is greater than the detriment to competition.

The application stemmed from the findings of a Ministerial inquiry into the electricity industry which recommended, among other things, that a governance structure be created to replace the current governance bodies under NZEM (the New Zealand Electricity Market), MARIA (the Metering and Reconciliation Information agreement) and MACQS (the Multilateral Agreement on Common Quality Standards).

On the basis of the information available to date, the Commission has reached the preliminary view that it is not satisfied that the public benefits of the proposed arrangement are likely to outweigh the competitive detriments.

The Commission now invites industry participants and other interested parties to make written submissions on the draft determination. The closing date for submissions is Wednesday 22 May 2002.

The Commission will hold a five-day public conference on the application on 12-14 and 19-20 June 2002 in Wellington. The conference will allow interested parties to make oral presentations to the Commission and for the Commission to ask questions.

A final determination on the application will be made in July.

The draft determination is available on the Commission’s website, www.comcom.govt.nz.

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