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Extend Consultation On EGB Authorisation

Issued 2 September 2002

Electricity Update: Commission To Extend Consultation On EGB Authorisation

The Commerce Commission is inviting submissions from interested parties prior to releasing its final determination on the Electricity Governance Board's (EGB) authorisation application.

Under section 58 of the Commerce Act, EGB applied to the Commission in December 2001 for an authorisation of an arrangement that provides the basis for the trading and delivery of electricity.

Commission Chair John Belgrave said the Commission has considered all aspects of the EGB application and has reached conclusions on many of the issues. However, the Commission has now given interested parties two weeks to provide comment on conditions it may impose on an authorisation.

Section 61(2) of the Commerce Act 1986 allows the Commission to place certain conditions on an authorisation and to limit the period of the authorisation.

In other work within the electricity sector, the Commission will release its discussion paper reviewing asset valuation methodologies within the next two months. The Commission has received a number of submissions on its issues paper (released in March), and has also received feedback on a draft of the discussion paper following a peer review process. This work on regulation of electricity lines companies is pursuant to Part 4A of the Commerce Act 1986.

Background The Commerce Act 1986, section 61(2): Determination of applications for authorisation of restrictive trade practices - (2) Any authorisations granted pursuant to section 58 of this Act may be granted subject to such conditions not inconsistent with this Act and for such period as the Commission thinks fit.

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.

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