Contact wants to sell Victoria station

Contact Energy is putting another of its Australian assets on the block, saying it wants to sell the Valley Power station in Victoria.

The power company owns a 40 per cent stake in the "peaking station" which generates electricity only at times when wholesale prices are very high - which is during the heat of the Victorian summer.

Contact owns the station in partnership with with International Power Australian and the Japanese company Mitsui. These two also want to sell their stakes.

Its interest in Valley Power dates back to October 2001 when it bought its 40 per cent share.

The other 60 per cent was owned by Contact's 51 per cent owner, US energy giant Edison Mission.

A plan to increase its stake in the station to 50 per cent attracted shareholder opposition, with claims that Contact's shareholders were being disadvantaged.

Contact called off plans to lift its stake after the Market Surveillance Panel said it would have to put details of the deal before its minority shareholders.

Contact chief executive Steve Barrett yesterday said the commercial logic for pursuing an integrated energy business in Australia had "changed fundamentally for a variety of reasons". These included the recent change in majority shareholder and the emergence of new opportunities in New Zealand.