"The Australian Competition and Consumer Commission has granted interim authorisation to the NSW electricity market arrangements, as embodied in the NSW Code of Conduct," Mr Allan Asher, Acting ACCC Chairman announced today.

"The Commission has granted interim authorisation, pending a full consideration of the issues, including a public consultation process."

"The granting of interim authorisation in no way implies that the Commission is satisfied with the arrangements of the proposed competitive market, and will reserve its judgement on the balance between anti-competitive detriment and public benefit until such time as the full authorisation process is undertaken," Mr Asher stressed.

The interim authorisation is a step forward in the introduction of a national electricity market which will provide for open trade in electricity between States and allow customers to choose their suppliers. The interim authorisation allows arrangements which could be considered price-fixing or otherwise anti-competitive.

A paper outlining issues that may be of concern is attached. Each issue will be considered in the light of public response and detailed analysis of the anti-competitive effect and public benefits that arise.

The ACCC has opted to grant interim authorisation to the arrangements in order to allow the reform process in the electricity industry. Interim authorisation will give the market participants protection from being found in breach of the Trade Practices Act 1974 (TPA), by entering into or engaging in conduct under the Code of Conduct and the related vesting contracts during the period of the interim authorisation.

The ACCC, however, would propose to revoke the interim authorisation unless further action is taken in relation to entry into the market and information flows in the market. In particular the ACCC was concerned about the NSW Government's stated policy to restrict entry to the market, and sought written assurance from the NSW Energy Minister that this policy would be altered by the end of 1996. The Minister has given written advice to the ACCC that, subject to Cabinet approval, the policy will be changed within that time frame.

The ACCC did not grant interim authorisation to the second tranche of vesting contracts as proposed in the application, but these will be reconsidered at the commencement of the national electricity market.