THE competition watchdog has poured cold water on AGL's $1.5 billion tilt for NSW electricity generator Macquarie Generation, saying an acquisition could see the energy heavyweight influence wholesale electricity prices across the eastern states.The ACCC delayed its final decision until March 4, casting doubt on whether the New South Wales government would be able to make a quick decision on the sale. The government was planning to announce its decision by the end of February.The ACCC released a statement of issues outlining its concerns about the proposed acquisition this morning, a day after AGL and two other suitors lodged final bids for the NSW assets, which have a book value of about $2 billion.Energy minnow ERM Power, which has been waved through by the ACCC, and Japanese power giant Marubeni are understood to be the other two bidders.ACCC chairman Rod Sims said an AGL acquisition would remove the largest source of independent generation capacity in NSW."">"We are considering whether this could raise barriers to entry and expansion for electricity retailers in NSW, with the potential result that end-users of electricity in NSW may not obtain the benefits of strong retail electricity competition," Sims said.Macquarie Generation, which owns the Bayswater and Liddell power stations, accounts for 27 per cent of NSW's power capacity, the ACCC said.In a statement, the ACCC said its "preliminary view is that the proposed acquisition is likely to result in a substantial lessening of competition in the market for the retail supply of electricity in NSW as a result of reduced access to competitively priced and customised hedge contracts".The watchdog also said the acquisition could substantially lessen competition in one or more markets for the wholesale supply of electricity in NSW, Victoria and South Australia."In addition, the proposed acquisition would mean that AGL would become the largest generator in each of NSW, Victoria and South Australia," Sims said."The ACCC is considering whether, as a result, AGL would have the ability and incentive to influence wholesale electricity prices in these regions."The watchdog has invited submissions in response to the statement by February 17, and has deferred its decision until March 4. The ACCC has already twice postponed its decision.A spokesman for NSW Treasurer Mike Baird on Wednesday told DataRoom that three final bids had been submitted for MacGen, but declined to comment further.The NSW government is understood to want to a quick decision on the sale, which it initially hoped would reap up to $2bn. The sale process is being run by Goldman Sachs.Deutsche is advising AGL and UBS is advising ERM. Credit Suisse is thought to have been acting for Marubeni but it is not known whether its mandate is still active.An AGL spokesman declined to comment. Marubeni also declined to comment.
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