The Electricity Industry Reform (EIR) Act prohibits the cross-involvement of electricity lines and supply companies, which would prevent Vector from pursuing its aim of acquiring a stake in the wind generation company.
In particular, Vector is applying for the exemption in relation to its involvement in the proposed development of the Te Rere Hau wind farm situated on the Tararua Ranges near Palmerston North in New Zealand, which is being developed by NZ Windfarms and NPBB Pty.
According to the Commerce Commission, the purpose of the EIR Act is to reform the electricity industry by separating electricity distribution from generation and retail, so as to promote effective competition in electricity generation and retail markets.
The commission said that it would only grant the exemption if it would not result in certain involvements in electricity lines businesses and electricity supply businesses that may create opportunities to inhibit competition in the electricity industry, or to cross-subsidize generation activities from electricity lines businesses.
Vector is now awaiting the commission’s decision on its application.
