The Australian Competition and Consumer Commission will not intervene in the acquisition by SP Energy of TXU Australia, ACCC Chairman, Mr Graeme Samuel, said today.
"The proposed transaction raised significant competition concerns regarding the joint ownership of parts of the National Electricity Market transmission network with merchant activities in generation and retail", Mr Samuel said. "However, following the offer of court-enforceable undertakings by SPE, the ACCC is satisfied that its concerns have been addressed.
"The ACCC regards the structural separation of the operation and control of the transmission from merchant activities as an important competition issue in the NEM. The ACCC was concerned by the potential joint ownership of transmission network assets and SPE's interests in generation. Furthermore the ACCC has for a considerable time aimed to ensure that effective ring fencing arrangements remain in place in regard to the contestable retail activities in the market.
"The ACCC has agreed to the court enforceable undertaking submitted by SPE that provides for the separation of the transmission and generation businesses, including certain activities associated with the ownership and operational control of TXU's Master Hedge Agreement and Torrens Island Power Station.
"The ACCC is satisfied that the undertaking provided by SPE appropriately addresses its concerns, including the commitment to non-discrimination, restrictions on access to information and enhanced ring fencing commitments".
Mr Samuel noted that the ACCC did not have competition concerns in regard to the acquisition by SPE of the gas assets of TXU, which include gas distribution pipelines and storage in Victoria and an interest in the SEAGas pipeline that connects Victoria and South Australia.
Subsidiary SPI PowerNet has also agreed to provide the ACCC with an annual report detailing the measures it has undertaken to ensure compliance with its obligations under the undertaking. The ACCC has also received guarantees associated with the operation of the Heywood interconnector whereby SPI PowerNet will provide certain documents relating to the operation of the interconnector should the ACCC request them.
Detailed reasons for this decision will be posted on the ACCC website shortly.