ACCC authorises CS Energy / CPM joint negotiation

The Australian Competition and Consumer Commission has issued a decision authorising* CS Energy Limited and Callide Power Management Pty Ltd (CPM) to jointly negotiate a price review with Anglo Coal.

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 jointly conduct negotiations with Anglo Coal.

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.

Both CS Energy and CPM have existing agreements with Anglo Coal which contain a price review mechanism to be conducted on a five-yearly basis. The ACCC grants authorisation for five years.

"The public benefits are not extensive, however, the joint negotiations will assist the parties avoid duplication and streamline the price review", ACCC Chairman, Mr Graeme Samuel, said today. 

"This is to be weighed against the fact that there appears to be little, if any, public detriment from the joint negotiation process. 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".

Mr Samuel said 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 deciding to grant authorisation.

Copies of the Determination will be available on the ACCC's website.

Background

*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.