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Electricity Industry Act 2010

Miscellaneous - Amendments to other enactments - Amendments to Commerce Act 1986

155: New heading and sections 54R and 54S substituted

You could also call this:

“New rules for deciding how to improve New Zealand's electricity grid”

The law has changed how decisions are made about improving New Zealand’s electricity grid. From 1 November 2010, a group called the Commerce Commission is now in charge of approving plans to upgrade the grid. These plans are made by a company called Transpower.

The Commerce Commission will now look at proposals that Transpower makes, even if those proposals were already being considered by another group before 1 November 2010. While the Commerce Commission is figuring out its new rules, Transpower still has to follow the old rules about making upgrade proposals.

When the Commerce Commission looks at these proposals, they’ll use the old tests and processes, but they can make some changes if needed. They don’t have to redo any work that’s already been done.

The Commerce Commission can change the timelines for looking at and approving grid upgrade plans, but they have to talk to Transpower first. The Electricity Authority, which used to handle these plans, has to give all the information they have about ongoing proposals to the Commerce Commission.

The Commerce Commission also has to create a new set of rules, called an input methodology, for how Transpower should make proposals about spending money on the grid. These rules need to say what information Transpower has to provide, how that information should be checked, and how Transpower should talk to electricity consumers.

The rules also need to explain how the Commerce Commission will judge these proposals and how long the process will take. These new rules have to be ready by 1 November 2011, but this deadline can be extended by up to three months if needed.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM2634588.

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Part 5 Miscellaneous
Amendments to other enactments: Amendments to Commerce Act 1986

155New heading and sections 54R and 54S substituted

  1. The heading above section 54R and sections 54R to 54U are repealed and the following heading and sections substituted:

    Transpower grid upgrade plans and capital expenditure proposals

    54RApproval of Transpower's grid upgrade plans

    1. The role of the Electricity Commission in requesting or approving grid upgrade plan proposals by Transpower (including proposals to amend existing grid upgrade plans) is transferred to the Commission on the commencement date.

    2. Subsection (1) applies both to proposals made on and after the commencement date and to any proposals that were requested or under consideration by the Electricity Commission before the commencement date.

    3. Until the input methodology required by section 54S is determined and published under section 52W,—

    4. Transpower must comply with Part F of the Electricity Governance Rules, as that Part relates to grid upgrade plan proposals; and
      1. when considering grid upgrade plan proposals, the Commission—
        1. must apply, with any necessary modifications, the grid investment test set out in Schedule F4 of Part F of the Electricity Governance Rules; and
          1. must apply, with any necessary modifications, those parts of section III of Part F of the Electricity Governance Rules that relate to the process for approving grid upgrade plans (which includes rules 12 to 15 and 17.2); and
            1. need not repeat any processes already undertaken by the Electricity Commission or undertake any processes that the Electricity Commission would have been required to undertake.

            2. To avoid doubt,—

            3. subsection (1) takes effect on the commencement date whether or not the Commerce Act (Transpower Thresholds) Notice 2008 or any administrative settlement between the Commission and Transpower has been amended to reflect the transfer referred to in that subsection; and
              1. nothing in this section affects the transfer from the Electricity Commission to the Electricity Authority of all other roles relating to transmission, such as setting grid reliability standards and the transmission pricing methodology.

                1. The Commission may change any timetables previously agreed for consultation on, and approval of, grid upgrade plan proposals, but must first consult Transpower on any timetable changes.

                2. To facilitate the transfer of roles referred to in subsection (1), the Electricity Authority must give the Commission copies of all information it holds regarding grid upgrade plan proposals that were under consideration by the Electricity Commission before the commencement date.

                3. In this section,—

                  commencement date means 1 November 2010

                    Electricity Governance Rules means the Electricity Governance Rules 2003 as they were immediately before their revocation by the Electricity Industry Act 2010

                      grid upgrade plan has the meaning set out in the Electricity Governance Rules.

                      54SCommission to prepare input methodology for capital expenditure proposals

                      1. The Commission must determine an input methodology for Transpower's capital expenditure proposals.

                      2. The input methodology must include—

                      3. requirements that must be met by Transpower, including the scope and specificity of information required, the extent of independent verification and audit, and the extent of consultation and agreement with consumers; and
                        1. the criteria the Commission will use to evaluate capital expenditure proposals; and
                          1. time frames and processes for evaluating capital expenditure proposals, including what happens if the Commission does not comply with those time frames.

                            1. The input methodology must be determined no later than 1 November 2011; but the Minister may, on the written request of the Commission, extend the deadline once by a period of up to 3 months, in which case notice of the extension must be given in the Gazette.

                            2. Subpart 3 of Part 4 applies to the input methodology as if it were an input methodology referred to in section 52T, except as provided in subsection (2) or (3) of this section.