NEW ZEALAND GAZETTE

No. 4

The effectiveness of competition in the physical spot market is determined in particular by:

• the number and physical characteristics of stations competing at the margin under various hydrological conditions;
• the portfolios of stations under common ownership and the ability and incentives this provides for manipulating the market;
• the extent to which electricity is not competitively dispatched through the wholesale market as a consequence of long-term supply contracts and/or vertical integration of generation and retail businesses.

When determining the optimal configuration for the split of ECNZ to ensure effective competition, the Government considered that an assessment of market shares alone was unlikely to provide robust information on market power issues in the spot market. Therefore, the Government found it necessary to undertake modellings to test the effect on competition of different combinations of stations.

Having determined that ECNZ should be split into 3 companies in order to achieve optimal outcomes, the Government would be concerned if any future aggregation of stations resulted in the ability to exercise market power in a material way.

Competition in the Contracts Market

Long-term contracts for electricity, most of which hedge against spot market prices, play a vital role in signalling expectations of longer-term supply and demand conditions. This is particularly important for signalling:

• emerging "dry year" conditions, to which New Zealand is particularly vulnerable;
• the need for and timing of investment in new generation capacity; and
• the value of investments in demand side management and energy efficiency.

Aggregation of vertically integrated generation and retail companies, while likely providing benefits in terms of efficient management of risk and minimising transaction costs, may affect the quality of price signals in the marketplace.

Competition in Retailing

The Government has sought to facilitate strong competition in the retail market by requiring the full and effective separation of line and energy businesses. This is expected to facilitate open access to lines for competing retailers. It also removes scope for lines businesses to cross subsidise electricity retailing and generation activities.

The Government has also stated to the electricity industry that it expects the industry to put in place, by 1 April 1999, low cost arrangements, such as "profiling", to allow consumers to readily switch retail supplier. The Government has announced that it is prepared to regulate for the introduction of such arrangements if this target is not met.

In the recent retail mergers and take-overs, which have occurred as part of the ownership separation of line and energy businesses, meters at customer premises have generally been sold to the retail business. This raises the possibility that access to meters may be used by some retailers to frustrate competition. In addition to Commerce Act remedies for the parties, the Government has advised the industry that it is monitoring developments and that if significant problems emerge it will take action to address the situation.

Signed at Wellington this 21st day of December 1998.

Hon. MAX BRADFORD, Minister for Enterprise and Commerce.

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Courts

Criminal Justice Act 1985

Notice of Confiscation of Motor Vehicle

Pursuant to section 84 (2) of the Criminal Justice Act 1985, an order was made in the District Court at Ashburton on Monday, the 14th day of December 1998, against Thomas Ian McLraith for the confiscation of the following motor vehicle:

1985 Mazda 626, registration No. MJ 3634.

R. G. J. GANE, Deputy Registrar.

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Notice of Confiscation of Motor Vehicle

Pursuant to section 84 (2) of the Criminal Justice Act 1985, an order was made in the District Court at Ashburton on Monday, the 11th day of January 1999, against Robert Murray Telfer for the confiscation of the following motor vehicle:

1985 Mitsubishi L200, registration No. MD 3725.

R. G. J. GANE, Deputy Registrar.

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Notice of Confiscation of Motor Vehicle

Pursuant to section 84 (2) of the Criminal Justice Act 1985, an order was made in the District Court at Ashburton on Monday, the 14th day of December 1998, against Ross Edmund Sutherland for the confiscation of the following motor vehicle:

1987 Nissan Navara, registration No. SA 9118.

R. G. J. GANE, Deputy Registrar.

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Notice of Confiscation of Motor Vehicle

Pursuant to section 84 (2) (a) of the Criminal Justice Act 1985, an order was made in the Papakura District Court on 9 December 1998, against Teokotai Teiri for the confiscation of the following motor vehicle:

Toyota Trueno, registration No. PL 3239.

H. McLAREN, Deputy Registrar.

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Order for Confiscation of Motor Vehicle

Pursuant to Section 84 of the Criminal Justice Act 1985

CRN: 8019029536

On the 13th day of January 1999 at the District Court at Hamilton, Warren Alfred Pedersen of 183 Maeroa Road, Hamilton, was convicted and sentenced to 3 months periodic detention and disqualified from holding or obtaining a motor driver’s licence for 12 months from 4 February 1999, following his conviction on 13 January 1999, for an offence of driving whilst disqualified having previously been convicted of same and in addition to the above-mentioned penalty, Judge J. L. Rota has ordered that a

1980 Toyota Corona motor vehicle, registration No. JO 2209