Dunedin Electricity Clear To Acquire Otago Power

Issued 6 December 2001/123

Commerce Commission Clears Dunedin Electricity To Acquire Otago Power

The Commerce Commission today cleared Dunedin Electricity Limited to acquire the business and assets of Otago Power Limited.

Dunedin Electricity is a wholly owned subsidiary of Dunedin City Holdings Ltd, the holding company for various trading enterprises of the Dunedin City Council. Dunedin Electricity owns the electricity distribution networks for the metropolitan Dunedin and the Central Otago areas. Its wholly owned subsidiary, DELTA Utility Services, provides lines maintenance and contracting services to Dunedin Electricity and others.

Otago Power owns an electricity distribution network which covers South Otago, coastal Otago (excluding metropolitan Dunedin), the Strath Taieri and the Maniototo areas.

Commission Acting Chair Paula Rebstock said that as the electricity lines networks are natural monopolies, the expansion of Dunedin Electricity’s monopoly over a larger geographical area would not result in a substantial lessening of competition in the post-merger electricity distribution market.

The proposed acquisition would result in a small amount of aggregation in the South Island market for the provision of lines maintenance and construction services, however the Commission considered this market to be contestable, and therefore was satisfied that the acquisition would not have, nor would be likely to have the effect of substantially lessening competition in the market.

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