The Commerce Commission (“Commission”), pursuant
to section 81 of the Electricity Industry Reform Act
1998 (“the EIR Act”), exempts The Lines Company Limited (“TLC”) from compliance with section 17 of the EIR
Act in respect of the cross-involvement (as that term is defined in the EIR Act) that would be created through
its investment in a hydro generation plant, located on
the Waikohu Stream near Gisborne, through TLC’s wholly owned subsidiary Matawai Hydro Limited (“MHL”) outlined in its application for exemption registered by the Commission on 5 March 2007.
The exemption is subject to the following conditions:
(a) TLC will ensure that no more than two-thirds of the Board of Directors of MHL are directors who are either:
(i) a manager of TLC;
(ii) an associate of TLC, other than by virtue of being a director of MHL; or
(iii) involved in the business of TLC;
(b) MHL and TLC’s electricity lines business must comply with rules 1 to 6 and 11 to 15 of the Arms Length Rules set out in Schedule 1 of the EIR Act;
(c) TLC must not be involved either directly or indirectly in the selling of electricity generated by the Matawai Scheme to any customer connected to TLC’s electricity network. This does not preclude the selling of electricity either into the New Zealand Wholesale Electricity Market, or to an electricity retailer for the purpose of supplying retail customers, whether those retail customers are connected to TLC’s electricity network or otherwise;
(d) any generation asset to which this exemption relates must not be connected to electricity lines owned or operated by TLC except to the extent that is necessary in order to connect the generation asset to the local distribution network; and
(e) this exemption is specific to the cross-involvements created through TLC’s involvement in MHL for the purposes of developing the proposed hydro generation plant at Matawai. It does not extend to any other interest or existing or future cross-involvement of TLC.
The exemption takes effect from the date of publication of this notice in the New Zealand Gazette.
The Commission may vary or revoke the exemption in accordance with section 81(5) of the EIR Act.