Commission preliminary view: property companies are covered by Electricity Industry Reform Act
1 April 1999
The Commerce Commission today reached a preliminary view that property owning companies which also convey and sell at least 2.5GWh of electricity a year are covered by the Electricity Industry Reform Act (EIR Act).
Commissioner Dr Kate Brown said that the Commission has been receiving many telephone calls and letters from property companies and their lawyers concerned about whether the EIR Act applies to the companies.
"It is important that they know how the Commission interprets the law," Dr Brown said. "Our preliminary opinion is that property companies that also convey and sell at least 2.5GWh of electricity a year to their tenants are covered by the EIR Act and must comply with its provisions."
"If they convey and sell electricity to tenants and do not have an exemption they are now at risk of breaching the EIR Act."
The Commission's opinion is that the EIR Act includes wiring in buildings in its definitions of electricity lines businesses. It is also the Commission's opinion that the EIR Act definition of electricity supply businesses includes building owners selling electricity to tenants.
The Act requires that, by today (April 1), businesses involved in conveying and supplying electricity must have in place corporate separation of their electricity generation and retail businesses from their lines businesses or have obtained an exemption from the Commission.
Companies can still apply to the Commission for exemptions.
The Commission released Decision 351 today, giving Trans Tasman Properties Limited (TTPL) a short time exemption for its cross-involvement in the Finance Centre in Auckland. The temporary exemption is until 20 working days after the Commission makes its final decision regarding TTPL's application for exemption from the EIR Act.
Dr Brown said that the Commission expects to make its final TTPL decision within two weeks. That decision will include its final view on how the EIR Act applies to property companies.
Media contact: Commerce Act Manager Geoff Thorn
Phone work (04) 498 0958, cellphone 021 630 466
Communications Officer Vincent Cholewa
Phone work (04) 498 0920