ACCC proposes to authorise CS Energy / CPM joint negotiation
The Australian Competition and Consumer Commission has issued a draft decision proposing to grant authorisation* to CS Energy Limited and Callide Power Management Pty Ltd to jointly negotiate a price review with Anglo Coal. The ACCC proposes to grant authorisation for five years.
CS Energy is the owner of the Callide B power station, while CPM and CS Energy are 50/50 joint venture partners in the Callide C power station. Anglo Coal owns the Callide coal mine.
Under the joint negotiation, CS Energy and CPM propose to agree to use the same data as the basis for the review, to engage joint experts and consultants and to conduct the negotiation process with Anglo Coal jointly. Both applicants have existing agreements with Anglo Coal which contain a price review mechanism to be conducted on a five yearly basis.
"Although not extensive, there are public benefits flowing from the joint negotiations through avoiding duplication and streamlining the price review", ACCC Chairman, Mr Graeme Samuel, said today.
"The ACCC accepts that there is little, if any, public detriment from the joint negotiation process. It recognises that the quantities of coal purchased will not be altered and, therefore, demand within the market will not be significantly impacted. Additionally, the ACCC places particular weight on the fact that Anglo Coal, the party most likely to be affected by the proposed conduct, does not oppose the joint review.
"The ACCC is currently satisfied that public benefits likely to flow from the joint negotiations outweigh potential anti-competitive detriment. As a result, the ACCC is proposing to grant authorisation".
The ACCC is seeking submissions from interested parties in relation to its draft determination in this matter. Copies of the draft determination are linked below. Submissions can be made to: The General Manager, Adjudication Branch, Australian Competition and Consumer Commission, PO Box 1199, Dickson, ACT, 2602. Submissions can also be lodged by email to adjudication@accc.gov.au.
*The Trade Practices Act 1974 prohibits certain forms of anti-competitive agreements, including agreements between competitors that limit their ability to deal with whom they choose or on the terms they choose (including price). Authorisation provides immunity from court action under the Act arising from such agreements but can only be granted where the ACCC is satisfied that the public benefit flowing from the conduct outweighs any public detriment.
