Application for EIR Act exemption

28 July 2004-05/011

Commission receives application for EIR Act exemption from Multiplex Funds Management

The Commerce Commission has received an application from Multiplex Funds Management Limited and related entities for an exemption under the Electricity Industry Reform Act 1998 in relation to ownership separation provisions.

Multiplex is a property developer and investor in New Zealand and in Australia. The application relates to Multiplex's proposed acquisition of the South City Shopping Centre on Colombo Street, Christchurch together with two buildings situated at 573 - 579 Colombo Street.

The properties are leased to third parties, and Multiplex entities supply, or propose to supply in future, electricity to these tenants. The properties comprise principally retail shopping outlets, with some commercial office units.

The purpose of the EIR Act is to reform the electricity industry to better ensure that costs and prices in the electricity industry are subject to sustained downward pressure and the benefits of efficient electricity pricing flow through to all classes of consumers, by effectively separating electricity distribution from generation and retail and promoting effective competition in electricity generation and retail markets.

The Commission may grant an exemption in respect of a business or involvement or interest, only where doing so:

a. would not result in certain involvements in electricity lines businesses and electricity supply businesses which may create incentives or opportunities:
i. to inhibit competition in the electricity industry; or
ii. to cross-subsidise generation activities from electricity lines businesses; and

b. would not result in relationships between electricity lines businesses and electricity supply businesses which are not at arms length.

ENDS

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