The Australian Competition Tribunal (ACT) has overturned a decision by the ACCC to ban AGL Energy from buying two New South Wales-owned power stations.
The ACT ruled in favour of AGL’s purchase of Macquarie Generation, which owns the Bayswater and Liddell power stations.
In its ruling, the tribunal said the acquisition of the Macquarie Generation’s assets by AGL may now be completed by June 24, next year.
The ACCC blocked AGL’s takeover bid in March, arguing the $1.5 billion deal – which would mean up to 80 per cent of the state’s energy generation would be controlled by three companies: AGL, Origin and EnergyAustralia – was likely to substantially reduce competition in the NSW retail electricity market.
However, the tribunal ruled in late June it was satisfied the proposed sale would likely result in “substantial public benefits” and the public detriments identified by the ACCC were “unlikely to arise”, as reported by Sky News.
The tribunal said it was satisfied after the sale there would be active competition in the state retail market, including by small retailers that would have a substantial and adequate hedge market available to them.
The Baird Government said the sale will add about $700 million to the state’s economy, which will go towards infrastructure projects.
AGL welcomed the decision, stating it vindicated the company’s view the acquisition would not hamper competition.
“The tribunal reached the view the proposed acquisition is not likely to result in a significant detriment to the ability of retailers, including small retailers, to compete in the NSW electricity market,” AGL commented in a statement.
“In addition, the tribunal concluded the acquisition of MacGen by AGL would produce a vigorous competitive market.”
ACCC chairman Rod Sims said he was disappointed with the decision, which would have implications for competition in the retail and wholesale electricity markets.
“The ACCC remains of the view that privatisation of these assets to an alternative bidder would achieve a more competitive outcome which in turn will benefit NSW consumers,” he said.
NSW Opposition Leader John Robertson said the ACCC had made the right call in attempting to block the sale.
“It’s worrying this company has been able to get around the competition regulator despite their warnings,” the Labor leader told the Australian Associated Press.