Notice of Exemption Infrastructure & Utilities NZ Limited The commission, pursuant to section 81 of the Electricity Industry Reform Act 1998, exempts Infrastructure & Utilities NZ Limited from the application of section 35 (1) (e) of that Act in relation to a prohibited cross-involvement in an electricity lines business, comprising the electricity distribution networks owned and operated by Powerco Limited and CentralPower Limited, and an electricity supply business owned and operated by TrustPower Limited. The exemption is subject to the following terms and conditions: (a) Infrastructure & Utilities NZ Limited will continue to use all reasonable endeavours to cease its involvement in CentralPower Limited and Powerco Limited by procuring the prompt sale of its shares in CentralPower Limited and its shares in Pukeariki Holdings Limited and by becoming non-associated with the New Plymouth District Council in respect of Powerco Limited. (b) During the period of the exemption, Infrastructure & Utilities NZ Limited will maintain an arms length relationship with both CentralPower Limited and Powerco Limited. Maintaining an arms length relationship means complying with the arms length rules defined in Schedule 1 of the Electricity Industry Reform Act 1998. (c) Infrastructure & Utilities NZ Limited will not exercise any right it may have to promote or veto the appointment of any director in CentralPower Limited or Powerco Limited. In particular, in respect of Powerco Limited, it will allow New Plymouth District Council, the other major shareholder in Pukeariki Holdings Limited, to make any determinations on directors that are required to be made under the Pukeariki Holdings Limited structure. Similarly, it will allow Palmerston North City Council and the CentralPower Electricity Trust to make the same decisions with respect to the appointment of directors to CentralPower Limited under the shareholders' deed in respect of CentralPower Limited. (d) The exemption expires at midnight on 30 June 2000 unless any variation or earlier revocation in terms of section 81 (5) occurs. (e) Infrastructure & Utilities NZ Limited will notify the commission 2 weeks in advance of additional involvement in any electricity lines or supply business, as defined in the Electricity Industry Reform Act 1998, which provides it on its own, or together with an associate, with an additional 0.5% of the assets, control rights or equity return rights of the electricity business. (f) Infrastructure & Utilities NZ Limited will provide the commission with monthly written reports beginning 1 month after the date of this decision on the progress it is making to achieve compliance with the Electricity Industry Reform Act 1998. The commission may vary or revoke this exemption in accordance with section 81 (5) of the Electricity Industry Reform Act 1998. The exemption takes effect from the date of publication of this notice in the New Zealand Gazette.