Competition worries bar wholesale electricity deal

The Commerce Commission has refused to grant Energy Market Services clearance to buy wholesale electricity market operator M-co NZ for an undisclosed sum.

Chairwoman Paula Rebstock said the commission was not satisfied the proposed acquisition "would not have, or not be likely to have, the effect of substantially lessening competition in relevant markets".

The Electricity Commission had approved the sale, conditional on Commerce Commission clearance.

Transpower spokesman Chris Roberts said the company was disappointed and had to wait until the New Year to find out the reasons.

"We haven't been given any indication as to what their reason is so it's difficult to say [if we are going to appeal] at this stage," Roberts said.

M-co was established in 1993 as a joint-venture company by Transpower, Electricity Corp, the Electricity Supply Association and the Electricity Networks Association.

It was to design, implement and operate a wholesale electricity market, which was completed by October 1996. Since then M-co NZ has been administrator of the electricity market.

M-co was bought by Rand Merchant Bank Australia in March 1999. RMBA is part of FirstRand, South Africa's largest financial services group, and is involved in wholesale market trading in Australasia.

EMS is the market's reconciliation manager. Its responsibilities include reconciling metering data against a register of contracts.

- NZPA