AGL Energy is seeking to overturn a decision by Australia's competition authorities to thwart its proposed acquisition of Macquarie Generation.
The Australian Competition and Consumer Commission (ACCC) has announced that AGL Energy has filed an application with the Australian Competition Tribunal to seek approval for its proposed $1.5 billion takeover of Macquarie Generation.
The ACCC issued a decision earlier this month to block the planned acquisition on the grounds that it would substantially diminish competition on the NSW market for retail energy, leaving the preponderance of the state’s generators in the hands of just three chief power vendors.
“The issues raised by these proceedings are of crucial importance for the structure and future competitiveness of the electricity generation and retail markets in NSW and beyond,” said ACCC chairman Rod Sims.
The NSW government is currently seeking a buyer for Macquarie Generation, which generates around 27 per cent of electricity in the state, as part of broader efforts to privatise its assets.
AGL had hoped that the takeover would put it in a better position to compete with its two chief rivals on Australia’s retail power market – Origin Energy Ltd and Energy Australia.
The ruling made by the ACCC concluded that the acquisition of Macquarie Generation by AGL would leave these three major electricity vendors in with control of as much as 80 per cent of energy generators in New South Wales, impeding the entry and growth of smaller competitors.
In opposing the decision of the ACCC, AGL said it would prefer that the issue be determined by a tribunal as opposed to a court of law, as the process for a tribunal decision is usually much faster, with a legislated timeframe of just six months.
“The ACCC’s decision has significant implications for the future of the energy industry in this country and, in our view, can’t be left unchallenged,” said AGL managing director Michael Fraser in a statement.
According to NSW Treasurer Mike Baird, the state government is still engaging in preliminary discussions with the under-bidders for Macquarie Generation, ERM Power and Marubeni, although their offers are reportedly around $300 million short of the $1.5 billion retention value.