Even though commentators think Vector won’t have any trouble acquiring at least Australia Gas Light’s 66.05% controlling interest in NGC, Vector is playing it safe by going to the commission.

“I don’t think Vector will have any trouble with the commission. Until they acquire NGC they have only minimal gas assets and NGC’s extensive pipelines represent a ‘bare transfer of a monopoly’ to whoever acquires it. So it shouldn’t represent any major hurdle,” one commentator told EnergyReview.Net.

The commission yesterday said Vector had applied, under the Commerce Act, to acquire up to 100% of NGC, as well as applying for an exemption under the Electricity Industry Reform Act for the potential cross-involvement of the merged group in both an electricity supply business and an electricity lines business.

Vector’s core business activities include electricity distribution (in Auckland and Wellington), natural gas distribution (in Auckland), and a telecommunications network business (in central Auckland and Wellington and in other parts of Vector’s electricity network area).

The commission has to determine whether Vector’s proposed acquisition would substantially lessen market competition and, under the EIR act, if Vector’s involvement in both electricity lines and supply bsuinesses would inhibit competition or allow cross-subsidisation of between the different businesses.