The State changed a clause in its Electricity Industry Act which forced interested bidder AGL to seek permission from the ACCC.

The ACCC denied AGL the opportunity to bid as part of a consortium, saying that AGL's 35% stake, in addition to its existing role as a power retailer and distributor in Victoria, could have reduced competition.

Acting Victorian Energy Minister Bob Cameron was reported to have said the changes to the Act was to ensure the bids by AGL and competitor Origin Energy, which did not have to seek ACCC permission, were on a level playing field.

Commentators were saying that the ACCC was certain to go to court to support its ruling if the AGL consortium won the tender.