NEW ZEALAND GAZETTE, No. 16 16 FEBRUARY 2010

COMMERCE ACT

(DECISION NOT TO DECLARE CONTROL – 1 APRIL 2008 TO 31 MARCH 2009: ALPINE ENERGY LIMITED, CENTRALINES LIMITED, COUNTIES POWER LIMITED, EASTLAND NETWORK LIMITED, ELECTRA LIMITED, ELECTRICITY ASHBURTON LIMITED, HORIZON ENERGY DISTRIBUTION LIMITED, MAINPOWER NEW ZEALAND LIMITED, MARLBOROUGH LINES LIMITED, NELSON ELECTRICITY LIMITED, NETWORK TASMAN LIMITED, NORTHPOWER LIMITED, OTAGONET JOINT VENTURE, POWERCO LIMITED, THE POWER COMPANY, TOP ENERGY LIMITED, WELLINGTON ELECTRICITY LINES LIMITED AND WESTPOWER LIMITED)

NOTICE 2010

Part 4A of the Commerce Act 1986 (“the Act”) came into effect on 8 August 2001 and, among other things, required the Commerce Commission (“Commission”) to implement a targeted control regime for the regulation of large electricity lines businesses (“lines businesses”)—namely electricity distribution businesses (“distribution businesses”) and Transpower New Zealand Limited. The Commerce Amendment Act 2008 (“the Act”) repealed Part 4A, however certain provisions of Part 4A continue to apply in connection with the breach of thresholds set under Part 4A before its repeal, including when those thresholds apply as default price-quality paths(^1).

The targeted control regime

Under section 57G(1)(b) of Part 4A (repealed), as applied by section 54N, the Commission was required to set thresholds for the declaration of control in relation to lines businesses.

The Commission reset the thresholds for all distribution businesses for a five-year regulatory period from 1 April 2004. These reset thresholds were set by the Commerce Act (Electricity Distribution Thresholds) Notice 2004 published as a Supplement to the New Zealand Gazette, 31 March 2004, No. 37, page 927.

Section 54J(2)(a) of the Act provides that on and after 1 April 2009, the thresholds for large electricity lines business that expired on 31 March 2009 are deemed to be section 52P determinations that apply those thresholds to each supplier as if the thresholds were default price-quality paths. A breach of a default price-quality path that occurs before the close of 31 March 2010 must be dealt with in accordance with section 54N(^2), which provides that the purpose of section 52A must be taken to be the purpose of Part 4A. For such a breach, and for breaches occurring on or after 1 April 2007 until 31 March 2009, the Commission may publish a notice of intention to declare control under Part 4A at any time before the expiry of 12 months after the end of the financial year in which the breach occurs(^3).

The process for making decisions on declarations of control was set out in section 57H of Part 4A (repealed), as applied by section 54N, which provided that the Commission must:

(a) assess large electricity lines businesses against the thresholds set under this subpart; and

(b) identify any large electricity lines business that breaches the thresholds; and

(c) determine whether or not to declare all or any of the goods or services supplied by all or any of the identified large electricity lines businesses to be controlled, taking into account the purpose of this subpart; and

(d) in respect of each identified large electricity lines business,—

(i) make a control declaration; or

(^1) Section 54N of the Act.

(^2) Section 54J(3) of the Act.

(^3) See section 54N(2)(b) of the Act.