The Australian Competition and Consumer Commission has accepted a court-enforceable undertaking from Aurora Energy and the Tasmanian government in relation to the acquisition of the Tamar Valley Power Station Project and other related assets by Aurora Energy.
The Tasmanian government is set to acquire the Tamar Valley Generation Assets from Babcock and Brown Power today. The government then intends to transfer those assets to Aurora Energy, the government-owned electricity retailer.
The undertaking requires the parties to hold the assets separate for an interim period, so that the ACCC is able to conduct a full competition assessment of the proposal.
"The commercial timing pressures on the parties meant that the ACCC was left with very little time to assess the acquisition," ACCC Chairman, Mr Graeme Samuel, said today.
"However, the Tamar Valley Power Station is not yet operational. In this case a 'hold-separate' undertaking that operates for an interim period protects competition while the ACCC conducts a comprehensive public assessment of the acquisition.
"This is a very different situation to a normal merger or acquisition because the Tamar Valley Power Station Project is under construction and is still some time away from being competitive. Furthermore, Aurora Energy, at the direction of the Tasmanian Government, has a strong incentive in the short term to maintain the assets and complete the project in order to maintain security of electricity supply in Tasmania.
"Once the ACCC has completed an assessment of the acquisition, involving comprehensive market inquiries, the ACCC will decide whether or not to oppose the acquisition," Mr Samuel said. "If the ACCC opposes the acquisition, it may seek divestiture orders from the Federal Court."
The undertaking is available on the ACCC's website, www.accc.gov.au, under Public registers.