5.0 Other Related Issues
5.1 Background
339. Although not directly relevant to the regime for electrical and gas work, the review did identify a number of other related issues to be addressed. In addition, some further separate issues outside the scope of the review have been identified. They are:
- installations of small LPG cylinders;
- funding transfers;
- publicity campaigns;
- development of standards; and
- submission of business plans.
5.2 Responses to 1999 Cabinet Decision
5.2.1 Installations Connected to Small Gas Cylinders
Review Recommendation 42
More work should be done to identify a cost-effective means of ensuring the safety of installations connected to gas cylinders less than 15kg in weight.
Work on installations supplied from small LPG cylinders carries a high risk and needs a skilled worker
340. The definition of gasfitting is such that any person may construct or maintain gas installations connected to LPG cylinders with a capacity of less than 15 kg. However the size of the LPG cylinder is not a true reflection of the complexity or size of the installation connected to it, or of the risks involved. Such cylinders are now widely used to supply caravans, boats and domestic installations and these types of installations are disproportionately represented in accident statistics.
341. To address this risk, it is proposed to extend the definition of gasfitting to encompass such installations, but retain the exclusion for installation work on any:
- gas appliance or fitting that is connected directly to a disposable container; and
- portable gas appliance that is designed to have with it, or attached to it, its own source of gas.
342. This would have the effect of requiring work on these installations to be done by or under the supervision of a licensed gasfitter.
343. Advantages of this approach would be:
- it would provide consistency with other gas installations;
- minor installations with little risk to public and consumers would be excluded; and
- it would reduce the disproportionately high accident rate from caravan installations in particular.
344. Disadvantages would be:
- the cost of compliance would increase, as there is currently no requirement to use licensed gasfitters. This could however be ameliorated to some extent by requiring gasfitters to have only the skills relevant to the particular work under the "qualified licence" proposal (refer section 2.2.5);
- there is likely to be significant resistance from those who currently do this type of work;
- the number and location of affected installations (some caravans are fixed and located in remote areas) would make it difficult to enforce the requirement; and
- a significant lead-in period would be required to allow time for those involved to gain the relevant skills and licence. An alternative to this approach would be to allow any person to do such work but require it to be inspected. This would be consistent with the electrical regime, but not consistent with the existing gas regime.
EWP Recommendation 21
345. It is recommended that the range of work required to be done by a licensed gasfitter be extended to include work on installations supplied by all types of LPG cylinders, except disposable cylinders. Work on portable gas appliances that are designed to have with them, or attached to them, their own source of gas, would be excluded from this requirement.
Legislative Implications
346. The definition of gasfitting contained in section 2(f) of PG&D Act would require amendment.
Administrative Issues
347. This proposal would require significant publicity and probably a special training programme for those who do this type of work.
5.2.2 Funding Issues
Review Recommendation 32
There will need to be some transfers in funding and/or resources from Commerce to OSH so that OSH can take responsibility for work currently undertaken by Commerce.
Levy funding
348. The Energy Safety Service of the Ministry of Economic Development is funded primarily from levies on the fuels for which the Service is responsible. OSH is funded from a levy on employers. This levy currently collects a surplus over the amount OSH spends and this surplus is held in a special account to be used to fund any deficit in the levy that might be incurred in the future. It is proposed that the transfer of activities from the Ministry to OSH would be funded by direct adjustments in the existing respective funding streams, that is, funding from the fuel levy revenues would be reduced and funding from the employer levies would be increased by drawing on the current surplus over current OSH spending.
349. The amounts involved have been initially estimated at $140,000 per annum. However refinement of this figure needs to await finalisation of the regime proposals.
350. In addition there would be a variety of transition costs, initially estimated at up to $760,000, which would depend on finalisation of regime proposals. The amount required is now considered likely to be less but will need to be reviewed. These costs should be met either by the industry, through the electricity and gas levies, or through income derived by the licensing Boards as appropriate. The EWP noted that provision for the funding of Standards would continue to be needed.
EWP Recommendation 22
351. It is recommended thatactivities transferred from ESS to OSH be funded by direct adjustments in the existing respective funding streams.
Legislative Implications
352. None.
Administrative Issues
353. Budget adjustments would be required at the time of implementation.
5.2.3 Publicity Campaign
Review Recommendation 33
Because the recommended changes to the legislation will have an effect upon consumer responsibilities, it is recommended that the Government undertake a publicity campaign in conjunction with the licensing boards to inform the public of changed obligations applying to electrical work and to reinforce the previous reforms carried out in 1992.
Review Recommendation 50
The Government should actively support projects and industry campaigns aimed at promoting the benefits of RCDs to the public.
The use of Residual Current Devices (RCDs) was strongly recommended in the Review
354. Submissions were made to the Review that residual current devices (RCDs) (which, internationally, are also referred to as residual current circuit breakers, safety switches, earth leakage circuit breakers, or ground fault interrupters) should be made mandatory.
355. Several submissions referred to a particular case of electrocution where an RCD may have prevented a fatal accident. In response to similar calls for making RCDs compulsory, the Office of the Chief Electrical Engineer produced the Report Relating to the Application of Residual Current Devices in New Zealand 1997. This report noted that the use of RCDs in high risk areas (such as bathrooms) is already a cited means of compliance with safety obligations. The report concluded that the use of RCDs should not be made compulsory as this would impose a substantial cost on society (an estimated $300 million) relative to the number of lives that RCDs could be expected to save (an estimated one life per year). Other ways of ensuring safety were thought to offer greater benefits.
356. The EWP noted that the publicity campaign, required to inform the public of the changes to the safety regime for electricity and gas, would be undertaken by the Government and the two licensing Boards and that funding would be required for this purpose.
EWP Recommendation 23
357. It is recommended that the Government, together with the licensing Boards, undertake a publicity campaign to inform the public of the changes to the safety regime for electricity and gas.
358. It is noted thatrequirements for using RCDs are being actively reviewed, and the Ministry of Economic Development is developing proposals to actively promote the appropriate use of RCDs.
Legislative Implications
359. None. Proposals to amend regulations and Standards would be developed as appropriate.
Administrative Issues
360. Necessary actions are already factored into work programmes.
361. A campaign would be necessary to publicise the changes to the safety regime for electricity and gas.
5.2.4 Development of Standards
Review Recommendation 48
The provisions in NZECP11 on inspection and testing of existing installations should be reviewed and developed into a New Zealand Standard or other form that could be used by the public when purchasing a house or other installation.
Standards have been set for inspection of existing installations
362. This has now been achieved through the inclusion of these requirements into NZS 3000.
EWP Recommendation 24
363. It is recommended that the inspection and testing provisions be reviewed through the Standards process to verify that they remain adequate.
Legislative Implications
364. Regulations will be required to recognise these provisions as adequate for the attestation of electrical safety of an existing installation.
Administrative Issues
365. None.
5.2.5 Submission of Business Plans
Review Recommendation 22
Boards should be required to submit business plans to the Minister each year that would include specific proposals for ensuring the maintenance of competence within their occupational groups and for increasing safety levels. Boards would also be required to report on their performance in the following year, and make the plans and performance results public.
Boards must submit annual business reports
366. The completion of annual reports is already provided for in the Electricity and PG&D Acts. Some refinement of these provisions is envisaged.
EWP Recommendation 25
367. It is recommended that the existing provisions for annual reports be refined to include business plans with specific proposals for ensuring the maintenance of competence and for increasing safety levels at reasonable cost, and to include the reporting of outcomes.
Legislative Implications
368. Minor changes to legislation would be required.
Administrative Issues
369. None.
5.3 Miscellaneous Proposals
5.3.1 Preface
Discussion is needed on a number of other proposals relevant to the gas and electrical industries
370. Included in the EnergySafe programme are a number of proposals that are associated with the energy safety legislation but do not flow directly from the Review. Most of these proposals have come from the Gas Association but are also relevant to the legislation applicable to the electrical industry.
371. The general objective of these proposals is to ensure that the legislation is outcome focused and performance requirements are clearly stated. Standards and Codes of Practices are identified, where appropriate, to provide either those outcome or a means of compliance with the stated outcomes.
372. It is intended that the existing Standards and Codes would be reviewed as part of the legislative reform programme and would be extended to include audit protocols and performance measures so that compliance can be confirmed. It is also intended that the parties charged with compliance would disclose that information probably through safety cases and/or asset management plans.
373. The objective behind the proposals is to clearly separate the worker and workplace safety requirements from the product and public safety issues. It has already been agreed that the former are to be covered under the HSE Act administered by OSH, while the latter fall under the Gas Act and Regulations administered by the Ministry of Economic Development.
374. In addition a number of the proposals are driven by the changes that have occurred in organisational structures and ownership arrangements since the existing legislation was put in place in 1992.
The topics covered in this section of the consultation paper are:
- Interpretations
- Registration of organisations
- Suitability of gas
- Odorisation
- Supplier's obligations
- Authority to disconnect
375. Although initiated by the Gas Association, several of the proposals also have relevance to the electrical industry.
5.3.2 Demarcation of Legislative Boundaries
At present the legislation is inconsistent and hard to understand
376. There are some areas of the gas legislation where there are inconsistencies and the intent can be hard to understand.
377. One of these areas relates to gas pipeline systems operating above and below 2000 Kpa, which are covered by different regulatory regimes. The former, known as transmission systems, generally pass through lightly populated areas where hazards are mostly occupation related. The latter, known as distribution systems frequently operate in built up areas where the greatest hazards are to the public.
378. Transmission pipelines are managed under a newly introduced "safety case" system. It is intended to provide a greater degree of consistency by allowing safety cases to be used also for distribution systems under the Gas Act. However, given fundamental differences in the operation and nature of risks with the two systems it may not be practical to make this provision mandatory for all gas network operators (although gas regulations in Victoria provide for this.)
379. The quality of gas is controlled under the Gas Act since it affects the safety of the public, the suitability for use with appliances, and determines the amount of energy sold to consumers. The Act covers gas supplied into the transmission system since the gas quality is generally controlled at the source of supply.
380. Another area is the interface of the Gas Act with the Dangerous Goods (Class 2 - Gases) Regulations in relation to LPG systems.
381. The Dangerous Goods Regulations are to be replaced by new regulations under the Hazardous Substances and New Organisms Act. It is intended that the Gas Regulations will be the controls for LPG in the vapour phase under the HSNO Act and that workplace/public safety interface issues will be dealt with by way of administrative arrangements between OSH, the ESS and possibly TLAs.
382. Further work is needed on these boundary issues to ensure:
- public safety matters and workplace issues are provided for clearly under applicable legislation (i.e. the Gas Act and the HSE Act respectively); and
- a high level of consistency of approach between transmission and network systems for both gas and electricity.
EWP Recommendation 26
383. It is noted that further work is continuing on legislative boundaries in relation to high-pressure pipelines and the interface with the Dangerous Goods Regulations. Any person interested in participating in this work, or in commenting on the outcomes, is invited to contact the Energy Safety Service.
Legislative Implications
384. Amend the Gas Act, Gas Regulations, Electricity Act, and Electricity Regulations.
5.3.3 Definitions: Interpretations As Set Out in the Act and Regulations
At present some definitions are not clear and consistent
385. Since the legislative reforms were introduced in 1992 a number of changes in organisational structure and ownership arrangements have led to a situation where the definitions of various parties are not clear and confusion over responsibilities exists. This makes it difficult to interpret the legislation, particularly for new entrants. The particular concerns relate to the "gas supplier" and to the definition of a "distribution system" but there are other definitions that could be improved also. The boundary between the gas supply system and the gas installation should also be reviewed.
386. Similar changes should be made in the Electricity Act.
387. Options for handling this issue are as follows.
- Do nothing. Present confusion and inconsistency will continue and responsibilities will remain confused.
- Introduce the use of the terms "network operator" and "energy retailer". These are the two types of operator and they should be clearly identified. The specific responsibilities of each should then be set out in the legislation. The terms gas distributor, gas operator, gas supplier, and gas retailer would all be replaced.
- Review the definition of "distribution system". From a safety perspective the termination of a distribution system at the outlet of the meter set is inappropriate. The meter generally operates at a pressure lower than the underground pipeline system, is above ground, and is subject to accuracy limits. It can also be owned by the energy retailer or the consumer and therefore is clearly not part of the network. It may be appropriate to define the consumer's point of supply to further clarify responsibilities.
- Review the boundary between the gas supply system and the gas installation. The boundary defines the limit of licensing and certification requirements, and is currently the gas meter. It is suggested that, with the changing commercial environment the point at which custody changes would be more appropriate.
EWP Recommendation 27
388. It is recommended that all definitions are reviewed (in particular current definitions for network operator and energy retailer), that the definition of distribution system is revised, and that the boundary between gas supply system and gas installation be made the point at which custody changes.
Legislative Implications
389. Amend the Gas Act, Gas Regulations PG&D Act. Electricity Act, and Electricity Regulations.
5.3.4 Suitability of Gas: Gas Quality and Compliance with Specifications
Current regulations on gas quality are inconsistent and unclear
390. In its current form Gas Regulation 3 requires all natural gas to comply with NZS 5442.1990, all LPG to comply with NZS 5435 and any other gas to be suitable and safe for use. It does not specify at what point it applies or who is responsible for ensuring compliance. Domestic and commercial gas appliances are generally not adjustable; they are specifically designed to operate on a gas that complies with a national specification that identifies a range over which the components and characteristics can vary while still maintaining safe operating conditions. However industrial appliances generally are far more flexible and can be adjusted to operate on gases that may or may not lie within the national specification.
391. In addition, there are no allowances for emergency situations where the supply of non-specification gas may be a safe and practical alternative to shutting systems down.
392. Options for handling this issue are as follow.
- Update the references to the latest Standards. This would allow the revised standards to be cited but does not resolve any other problems.
- Add details of parties responsible for compliance. This is a key task of regulations and would clarify the responsibilities for the parties involved.
- Identify the point or points in the supply system where compliance is required and could be audited. This would further clarify for all parties the point where compliance is required and would allow blending and co-mingling of gases at other points.
- Identify only the minimum requirements. Only certain sectors of the market require compliance with national specifications. Where appliances are readily adjustable and consumers are able to specify other requirements, these should be able to be negotiated under normal commercial arrangements.
- Amend to cover methane-based gases. Gas is now supplied from landfill drainage as well as from petroleum extraction and hence the methane-based family of gases should be referenced rather than natural gas.
393. The key requirement is for the regulation to specify that all gas supplied must be safe and suitable for use. The national specifications provide the means of compliance for the majority of users and this should be the general requirement. However there should be provision for parties who so agree to contract for gas complying with alternative specifications.
394. Another requirement is to specify clearly who is responsible for ensuring compliance with the key requirement and at what point in the supply chain compliance is required. The gas retailer is the only party who has a contract with the consumer and knows what appliances the consumer has, and therefore the gas retailer should be charged with the responsibility of ensuring that the gas that is supplied is suitable and safe for use. The point where the gas enters the consumer's installation (the consumer's point of supply) is the only point where compliance should be a legal requirement.
395. It is a matter for commercial contracts between the transporters and the gas wholesalers and retailers how compliance is achieved at the consumer's point of supply. Various gases may be blended through the transportation system but the requirement is at the consumer's point of supply.
396. The final issue relates to emergency situations when, due to an incident, gas does not comply with the specification. In that case it may still be suitable and safe for use and can continue to be supplied. An example could be where one component is outside the range specified but is still acceptable from a combustion point of view. Alternatively, if it is not safe or suitable the gas retailer is required to prevent the consumer from using that gas. In either case the retailer has to make a judgement.
EWP Recommendation 28
397. It is recommended that the Gas Regulations:
- require that all gas supplied by gas retailers must be safe and suitable for use;
- identify NZS 5442 and NZ 5435 as the standards to be used for natural gas and LPG respectively, except in emergency situations; and
- allow parties to contract out of using these standards.
Legislative Implications
398. None (regulations under the Gas Act can be amended by departmental processes).
5.3.5 Gas Odorisation
The code for gas odorisation is out of date
399. In its current form Gas Regulation 5 requires all gas that is supplied, to be odorised. The objective is that gas that escapes from the system can be readily detected before a hazardous situation can arise. While odorisation is the most widely used means of compliance, other means are possible in some situations. In addition, the industry has changed significantly over recent years, and this has created some uncertainties as to responsibilities for odorisation and checking.
400. Further work is being done to develop a regime that requires that gas that is supplied must be readily identifiable at all concentrations and all situations that may be unsafe, and that recognises the odorisation code (as amended) as a means of compliance.
EWP Recommendation 29
401. It is recommended that the Gas Regulations reflect the view that gas must be easily detected by users at 20% of the Lower Explosive Limit (LEL) and that the Odorisation Code GCP 3 be used as a means of compliance.
Legislative Implications
402. None (regulations under the Gas Act can be amended by departmental processes).
5.3.6 Suppliers' Obligation to Be Assured of Safety of Installation
The regulations are inefficient and inconsistent
403. Suppliers' obligations to be assured of the safety of installations are set in the Gas Act s47(3), Gas Regulations 1993 regulation 26; Electricity Act s114 (3), and Electricity Regulations 1997, regulation 44.
404. For gas, the obligation is ongoing (i.e. is not limited to first connection).
405. It was inserted as a means of monitoring installation safety, and to ensure a dangerous installation does not compromise supply safety. It was expected to provide a measure of backup when self-certification was first introduced.
406. It adds a significant compliance cost on suppliers, and cannot be complied with for any LPG installation supplied from a portable cylinder. It also cannot be complied with in the natural gas industry for any addition or alteration, as the gas supplier is unaware that these have taken place in most instances.
407. Options for handling this issue are as follows.
- Continue the status quo: It is inappropriate to continue to impose a legislative requirement on a party who cannot comply through lack of information. The information needed by gas suppliers in order to comply would have to be provided by consumers who themselves can perform the role.
- Apply the obligation only at first connection (as is done with electricity). This would be able to be achieved in the natural gas sector because the supplier has contact with the consumer at that time; however it would still not be achievable for LPG installations supplied from cylinders.
- Remove the obligation entirely.
408. The EWP is of the view that the obligation is too difficult to justify in the case of work on existing installations. However it has no firm view yet on whether it should apply for new installations. Arguments for removing the obligation are:
- consumers are in the best position to ensure that the self-certification by installers is carried out;
- retaining the obligation would dilute the consumer's responsibility for the safety of the installation;
- supplier should have no accountability for their consumers' installations, over which they have no control;
- the obligation is relatively ineffective because it does not monitor additions, alterations, or installation damage, the situations that are likely to impose the greater risk; and
- it is difficult to maintain for LPG installations.
409. Arguments for retaining the obligation are:
- suppliers should have some accountability to ensure the installations they supply are safe; and
- the obligation provides a means of tracking at least some Certificates.
EWP Recommendation 30
410. It is recommended thatany requirement placed on gas suppliers, in relation to sighting certification of existing installations, be deleted.
411. Views are sought on whether the requirement on both electricity and gas suppliers in relation to new installations should also be deleted.
Legislative Implications
412. Amend s47(3) of the Gas Act and Gas Regulation 26, and possibly s114(3) of the Electricity Act.
5.3.7 Give Authority to Disconnect/Make Safe
The current legislation does not cover important safety issues
413. Section 48 of the Gas Act provides power of entry for anyone authorised by the PG&D Board to establish compliance with Section 47 of that Act. There is a similar provision in section 115 of the Electricity Act.
414. There is however no authority for such a person to disconnect or make safe any unsafe situation.
415. It has been proposed that authority be given to empower the relevant Board to authorise any person to disconnect or make safe if he/she is satisfied that the situation is unsafe. This provision could either allow for general authority to be given, or could require specific authority to be given on a case by case basis.
416. Such a provision would enable prompt remedy of any dangerous situation. It would however be expected to be very sensitive, could have significant liability issues, and would involve a significant change in role of the Board.
417. An alternative is to explore another mechanism whereby the person on site has the ability to disconnect or make safe an unsafe site.
EWP Recommendation 31
418. It is recommended that further work be done on a mechanism to provide for the person on site to be able to disconnect or make safe any unsafe situation.
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