Multinet/Ikon Energy privatised

Victoria's second gas distribution and retail companies, Multinet and Ikon Energy, have been sold to The Energy Partnership, comprising 50 per cent Utilicorp United Inc. and 50 per cent Australian investment manager AMP, for $1.97 billion.

The consortium already owns the Victorian electricity distribution company, United Energy.

The sale brings to $26.4 billion the total proceeds to date from Victoria's energy reform program since electricity reforms began in 1995.

Multinet/Ikon Energy is one of the three gas distribution-retail companies created from the disaggregation of the former Gas and Fuel Corporation in 1997.

The sale will allow The Energy Partnership, which purchased United Energy in August 1995, to offer multi-energy services to Victorians and meet the Government's objective of achieving an integrated energy market.

Utilicorp, a Missouri-based energy and services company, holds gas or electricity customers in eight American states, Canada, New Zealand and Australia and delivers wholesale natural gas in the United Kingdom.

AMP is one of Australia's largest investment managers, with more than 1.4 million shareholders nationwide. The AMP group of companies manages more than $A150 billion worldwide.

Multinet distributes gas to the eastern suburbs, covering about 43 per cent of the metropolitan area and holding the largest customer base of 587,000 across 23 municipalities.

Ikon has the largest customer base of the three retailer companies with 504,000 across the eastern and south-eastern suburbs. It retails gas to half of the State's largest industrial users and the largest share of industrial and commercial customers.

The first stapled company, Westar/Kinetik, was sold to Texas Utilities for $1.617 billion in late January.

Texas Utilities also owns Eastern Energy, one of the five Victorian electricity distribution businesses, and is building an underground gas storage at Port Campbell to provide reserve gas for the State network.

A new regulatory framework was established under the industry reforms to monitor gas companies and protect customers. The framework includes the Australian Competition and Consumer Commission, which monitors transmission pricing; the Office of the Regulator-General, which monitors service and pricing; the Office of Gas Safety, which monitors safety measures; and the Energy Ombudsman, which handles complaints and dispute resolutions.

Mr Stockdale said the Government would continue to meet all existing community service obligations, including the Winter Energy Concession and the Energy Relief Grant Scheme.

(News Release, Office of the Treasurer, 12 March 1999)