AGL Energy's proposed bid for huge NSW power producer Macquarie Generation is to be examined closely by the competition watchdog, which has also started a review of a similar proposal by smaller player ERM Power.
The Australian Competition and Consumer Commission (ACCC) advised of the informal reviews of both proposed deals on its website and called for comments from interested parties.
Both AGL and Queensland-based ERM have been shortlisted to participate in the final round of the NSW government's privatisation process for MacGen, which produces more than one-quarter of the state's electricity. China's Shenhua Energy is also understood to be on the list.
AGL, which already owns the major Loy Yang A base-load station in Victoria, is widely expected to be able to bid for just one of MacGen's two large power stations.
ERM, which has no baseload power production in the southern and eastern states, will face fewer competition issues, but is expected to face a challenge putting together financing for a bid for MacGen, which is expected to fetch about $1.5 billion.