Executive Summary
2. On 22 May 2006, the Minister of Commerce announced that Parts 4 and 5 of the Commerce Act (which relate to the control of goods and services; and to authorisations and clearances) will be reviewed.
3. Officials have undertaken an initial scoping exercise, and now consider there is value in including Part 4A (which contains provisions relating specifically to the control of electricity lines businesses) in the Review of the Commerce Act. There are many linkages between the regulatory control provisions in Parts 4 and 5 and the electricity specific provisions in Part 4A. Furthermore, many of the regulatory issues identified by officials to date relate to the Part 4A provisions in addition to the generic control provisions.
4. The recommendation to include Part 4A is not a response to the Commerce Commission's recent announcement that it intends to declare control of the electricity distribution services supplied by Vector. Any legislative amendments that result from the Review will not come into effect until 2008 at the earliest, and therefore will not affect the outcome of the current regulatory processes (viz., the Commission's consideration of control in respect of Vector, Unison, and Transpower).
5. Cabinet has agreed to the introduction of a targeted (thresholds) control regime for gas pipelines (CAB Min (05) 27/3). Legislation for this is to be modelled on Part 4A of the Commerce Act. Officials consider that work on the design and introduction of this regime should be deferred until the Review is complete. Officials consider that the risk of deferring the introduction of a gas thresholds regime is low given that the two largest gas pipeline businesses have their gas distribution services under Part 5 control, and the Commerce Commission recently found no case for controlling other gas pipeline businesses.
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