This output class provides policy advice to ensure the operation of energy and resource markets (electricity, oil, gas, geothermal, coal, minerals and other natural resources) is efficient and meets government objectives. Outputs in this output class include:

monitoring and advice to government on effective regulation of the electricity market and implementing regulation as required;
providing advice to government on effective regulation of the gas market and implementing legislation/regulation as required from 2003 onwards;
monitoring and advice to government on effective retail competition in the petroleum market;
contributing to policy advice from an economic development perspective on the development of a response to New Zealand's climate change obligations under the Kyoto Protocol;
providing advice on efficient allocation, obtaining a fair financial return and land access for Crown-owned minerals;
providing advice to government on Treaty of Waitangi issues in relation to natural resources, in particular the Waitangi Tribunal claim with respect to petroleum, and the extent to which the Crown is meeting its Treaty obligations in managing petroleum and minerals;
developing a policy framework for bioprospecting in New Zealand; and
contributing to the development of a policy framework for managing New Zealand's oceans, including policy advice on the regulation of minerals exploration and mining beyond New Zealand's territorial sea.

Contribution to the Ministry's Outcomes

This output class contributes to the foundation and growth outcomes. The contribution of the respective outputs is described in italics below.

The Resources and Networks Branch is the principal provider of these outputs.

Service Performance Objectives - Output Class Specific

Generic quantity, quality and timeliness performance measures for all policy advice, Ministerial services and briefings supplied by the Ministry of Economic Development are detailed in Quality Standards for Policy Advice and Ministerial Servicing.

Where appropriate, comparative figures for the previous year are shown in parentheses.

2002/2003 Performance Measures and Standards

Policy Advice

Policy advice will be delivered in accordance with the terms of the work programme agreed with the Minister.

Key Deliverables in the Work Programme for 2002/2003

Gas Market

Provide advice and reports as required by the Minister on gas market regulation.

This output is concerned primarily with ensuring the efficiency of the gas market by developing a policy framework to facilitate the transition to a post-Maui gas environment and ensuring that industry arrangements deliver gas in an economically efficient manner.

Electricity Market

Provide advice and reports as required by the Minister on electricity industry self-regulation and delivery of outcomes and objectives in the Government Policy Statement on Electricity;
Provide advice on the establishment of a Crown Entity Electricity Governance Board if required and implement if necessary; and
Provide advice and report to the Minister on the Commerce Commission's administration of electricity line regulation, annually within three months of the Commission's annual report being tabled in the House.

This group of outputs aims to ensure efficient supply of electricity by:

effective governance of the electricity sector;
effective wholesale and retail competition while ensuring efficient management of dry-year risk; and
ensure efficient line services (including security of supply and efficient prices).

Petroleum Market

Report as required by the Minister on competition in petrol, diesel and other markets; and
Provide advice, as necessary, on petrol and diesel quality regulations.

This output aims to:

an efficient petroleum market (including efficient prices, security of supply and acceptable petrol and diesel quality); and
that New Zealand is part of international measures co-ordinated by the IEA to ensure security of oil supplies.

Climate Change

Make a significant contribution to advice on a domestic policy package, as co-ordinated by the climate change project team, by 30 June 2003;
Make a significant contribution to the development of the Climate Change Response Amendment Bill, by 30 June 2003;
Develop technical standards and formats for a national climate change registry in accordance with international requirements, by 30 June 2003; and
Represent New Zealand's economic development interests in negotiations on the United Nations Framework Convention on Climate Change and Kyoto Protocol, by 30 June 2003.

This output is concerned with ensuring that New Zealand's negotiating position in ongoing climate change negotiations and any resulting domestic implementation are informed by a New Zealand economic development perspective.

Natural Resources

Provide advice and reports as required by the Minister on efficient allocation and obtaining a fair financial return from Crown-owned minerals;
Report to the Minister on the land access provisions of the Crown Minerals Act, by 30 June 2003;
Provide policy advice to the Minister on how the Government should respond to any Waitangi Tribunal report in respect of natural resources, within three months of the report being issued;
Report to the Minister on the extent to which the Crown is meeting its Treaty of Waitangi obligations in managing petroleum, by 31 March 2003;
Develop protocols between the Minister and relevant iwi or hapu in respect of the management of Crown-owned minerals in the context of individual Treaty claims;
Report to the Minister with recommendations on a suitable policy framework for bioprospecting, by 30 June 2003; and
Participate actively in the inter-departmental officials' group on oceans policy and keep the Minister informed of developments through regular reports.

This group of outputs is aimed at ensuring the effective and efficient allocation and management of Crown-owned resources by:

a clear basis for access to natural resources;
that competing uses can be decided objectively, expeditiously and at reasonable cost;
transaction costs;
certainty to investors;
that the Government is in a position to respond objectively and expeditiously to historical and contemporary Treaty of Waitangi claims in respect of natural resources; and
that Māori interests are taken into account.

Costs: Vote Energy, Output Class D1

	Forecast 2002/2003	Supplementary Estimates 2001/2002	Estimated Actual 2001/2002
	$000	$000	$000
Revenue Crown	2,728	2,703	2,703
Third Party Revenue	47	47	47
Expenses	2,775	2,750	2,750
Surplus/(Deficit)	-	-	-

Output Class D2 - Management of the Crown Mineral Estate

Description

This output class provides services relating to the management of Crown-owned minerals under the Crown Minerals Act 1991 and minerals programmes issued under this Act.

The Crown owns all in-ground petroleum, gold and silver in New Zealand and approximately half of the coal and other mineral resources. It also has jurisdiction of the petroleum and minerals in New Zealand's exclusive economic zone and continental shelf.

Outputs in this output class include:

maintenance of an efficient and effective management regime for the exploration of petroleum, mineral and coal resources;
allocation and management of prospecting exploration and mining permits;
collection of royalties, levies and fees related to petroleum and minerals extraction and permits;
promotion of investment opportunities in exploration and development of petroleum and minerals;
management of the geoscience resource data library; and
Crown minerals policy advice.

Contribution to Ministry's Outcomes

This output class primarily contributes to the foundation and growth outcome.

These outputs will enable the Ministry to manage and allocate property rights and Crown-owned resources efficiently by:

maintaining resource administration regimes which create a competitive advantage for business to invest in New Zealand over other nations;
ensuring that the allocation methodology for exploration permits is recognised internationally and domestically as being rigorous, effective and timely, thus giving business confidence in their allocated property interests; and
being recognised by the industry as effectively advising on prospecting opportunities.

The Crown Minerals Group of the Operations Branch is the principal provider of these outputs.

Service Performance Objectives - Output Class Specific

Where appropriate, comparative figures for the previous year are shown in parentheses.

2002/2003 Performance Measures and Standards

Policy Advice

Policy advice will be delivered in accordance with the terms of the work programme agreed with the Minister.

Permit Allocation and Management

Quantity

Expected numbers processed:

220 (197) permit and permit change applications; and
440 (265) permits monitored for compliance with conditions.

Quality

Permits will be monitored for compliance with conditions to ensure the integrity of the allocation system and action will be taken where there is evident non-compliance. This includes reviewing mineral mining permit work statements. Each permit will be reviewed from a compliance perspective as follows:

all (100%) petroleum permits will be monitored for compliance with conditions on work programme milestones;
review and approve 250 (estimated) minerals mining permit work statements; and
review 120 (estimated) minerals prospecting and exploration permit work programme commitments based on annual activity reports.

Timeliness

90% (90%) of new permit applications will be processed within an average time of six months of receipt.

90% (90%) of permit change applications will be processed within an average time of three months of receipt (excluding applications for extension of area).

90% (90%) of mining permit work statement reviews will be undertaken within 30 clear business days of receipt.

Collection of Royalties, Levies and Fees

Quantity

Amounts collected:

royalties - $35.1 million ($34.5 million);
energy resource levies - $100.7 million ($95.5 million); and
departmental fees - $3.18 million ($3.5 million).

Quality

Undertake at least three (three) compliance audits of significant energy resource levy or royalty payers within five months of receipt of annual royalty or levy and pursue any shortfalls.

Timeliness

95% (95%) of royalties will be collected within one month of due date.

90% (90%) of fees will be collected within two months (three months) of due date - 90% (90%).

Management of the Geoscience Records and Reports Library

Quantity

130 (120) records and reports received from petroleum and minerals holders will be entered into the resource data library.

Timeliness

90% (90%) of resource data information requests will be responded to within five clear business days of receipt.

Costs: Vote Energy, Output Class D2

	Forecast 2002/2003	Supplementary Estimates 2001/2002	Estimated Actual 2001/2002
	$000	$000	$000
Revenue Crown	2,184	2,184	2,184
Third Party Revenue	3,186	3,486	3,088
Expenses	5,276	5,576	5,576
Surplus/(Deficit)	94	94	(304)

Output Class D3 - Administration of Gas and Electricity Regulations

Description

This output class provides advice on the administration of the gas and electricity safety, supply quality and measurement regimes, electrical worker licensing, and information disclosure regimes for the gas and electricity industries. Outputs in this output class include:

reviewing and implementing changes in legislation, regulations, standards and codes of practice in the electricity and gas sectors;
completing and commencing implementation of the Electricity Industry Safety Strategic Plan and continuing implementation of the Gas Industry Safety Strategic Plan;
operating an effective investigation, compliance, enforcement and communication regime for gas and electricity safety;
pursuing and implementing international agreements around electricity and gas regulatory regimes at the regional and bilateral levels;
undertake a petroleum monitoring programme in accordance with regulatory requirements;
administration of electrical workers' registration and licensing; and
contributing to a good understanding of energy sector performance by administration of gas and electricity information disclosure regulations.

Contribution to Ministry's Outcomes

This output class primarily contributes to the foundation outcome. The contribution of the respective outputs is described in italics below.

The Energy Safety Service (Ministry of Consumer Affairs), the Electrical Workers Licensing Group (Operations Branch), and the Resources and Networks Branch are the main providers of these outputs.

Service Performance Objectives - Output Class Specific

Where appropriate, comparative figures for the previous year are shown in parentheses.

2002/2003 Performance Measures and Standards

Energy Safety Service

Quantity

75 electricity standards and four (7) gas standards will be published under funding contracts with Standards New Zealand.

Two (4) electrical and one (1) gas codes of practice will be published.

90 (200)¹⁹ audits and inspections of gas and electricity appliances, installations and networks and distribution systems will be undertaken.

90 investigations of gas and electricity accidents and incidents will be undertaken.

One additional international agreement will be concluded by 30 June 2003.

250 (250) petroleum monitoring tests will be undertaken.

20 (estimated) safety articles, activity reports and public statements will be released.

The safety of the electricity and gas sectors minimises transaction costs for consumers and businesses. Regulation of these sectors provides minimum acceptable levels of public and product safety in an effective and low cost manner.

Quality

External clients on average rate the Energy Safety Service overall performance as (3) satisfied to (4) very satisfied, as evidenced by an annual survey.²⁰

All (100%) prosecution and prohibition processes meet legal and policy requirements.

All (100%) published material intended for external audiences meets the Ministry of Consumer Affairs' publication guideline standards.

Timeliness

Key milestone dates outlined in the following Energy Safety Service work programmes will be met:

legislation, regulations, standards and codes of practice;
investigation, compliance, enforcement and communication regimes; and
international agreements.

The key milestone dates required of the Energy Safety Service in the electrical industry and gas industry strategic plans will be met.

90% (90%) of audit, inspection and accident investigation reports will be completed within 30 working days of audit, inspection or accident.

The TTMRA gas appliance special exemption programme for New Zealand will be finalised by 30 June 2003.

The petroleum monitoring programme will be completed by 30 June 2003.

Implementation of a petroleum testing regime ensures that petroleum products are of the required quality. These specifications are designed to ensure maintenance of certain quality standards from both consumer protection and environmental protection perspectives.

Electrical Workers Licensing

Quantity

Expected numbers processed:

20,500 applications for registration and licensing of electrical workers; and
1,500 (3,500) competency audits of electrical workers.

Quality

All (100%) decisions by the Registrar that are referred to the Electrical Workers Registration Board comply with the Electricity Act 1992 and Electricity Regulations 1997 and with published policies.

Timeliness

95% (95%) correctly completed registration and licence applications will be processed within 10 clear business days of receipt.

All (100%) complaints against electrical workers will be processed to notification of Board decision (subject to external parties) within 25 (25) weeks.

Information Disclosure

Quantity, Quality and Timeliness

Undertake annual compliance checks of all gas and electricity information disclosures, with 80% of checks completed within 60 working days of their receipt by the Ministry.

Review the residual need for electricity disclosure regulations and make recommendations to the Minister, by 31 March 2003 (the main function of these regulations is to pass to the Commerce Commission).

Review the gas disclosure regulations in the light of the gas market review, and make recommendations to the Minister, by 31 March 2003.

Produce an annual report on electricity line companies, by 31 December 2002, with no significant errors or omissions.

The group of information disclosure outputs will contribute to effective regulation and self-regulation of the energy sector by:

available information that will assist market participants to make well-informed investment and consumption decisions;
available information that will, through public pressure, encourage self-regulation by market participants with market power; and
information that can be used for reviewing the effectiveness of the regulatory regimes applying in the energy sector, and for developing policy proposals, should this be necessary.

Costs: Vote Energy, Output Class D3

	Forecast 2002/2003	Supplementary Estimates 2001/2002	Estimated Actual 2001/2002
	$000	$000	$000
Revenue Crown	895	772	772
Third Party Revenue	7,420	7,490	7,490
Expenses	8,226	8,174	8,174
Surplus/(Deficit)	89	88	88

Output Class D4 - Energy and Resource Information Services

Description

This output class provides information and technical advice on energy and resources. Outputs in this output class include:

monitoring and advising government on security of petroleum supply;
monitoring energy prices, costs and profits (including those for petrol, diesel, electricity and gas);
collecting, compiling and publishing comprehensive energy sector data;
preparing and publishing energy sector future scenarios; and
maintaining and publishing an inventory of energy sector greenhouse gas emissions.

Contribution to Ministry's Outcomes

This output class primarily contributes to the foundation outcome. The contribution of the respective outputs is described in italics below.

These outputs will contribute to effective regulation and self-regulation of the energy sector by:

making available information that will assist market participants to make well-informed investment and consumption decisions;
making available information that will, through public pressure, encourage self-regulation by market participants with market power; and
providing information that can be used for reviewing the effectiveness of the regulatory regimes applying in the energy sector, and for developing policy proposals, should this be necessary.

The Resources and Networks Branch is the principal provider of these outputs.

Service Performance Objectives - Output Class Specific

Where appropriate, comparative figures for the previous year are shown in parentheses.

2002/2003 Performance Measures and Standards

Key Deliverables in the Work Programme for 2002/2003

Participate in IEA emergency response measures to meet IEA requirements.
Produce weekly, quarterly and annual reports of price movements for different energy sources, as requested by the Minister.
Publish the biannual Energy Data File, by 30 September 2002 and 31 March 2003.
Produce reports on future energy scenarios, as requested by the Minister.
Publish an Energy Outlook report, by 30 September 2002.
Collect and compile inventory information annually by the deadlines set by the Framework Convention on Climate Change (FCCC) secretariat.
Publish statistics on Energy Greenhouse Gas Emissions, by 30 June 2003.

Making publicly available comprehensive information on energy demand and supply scenarios assists market participants to make well-informed investment and consumption decisions. Providing projections of energy sector greenhouse gas emissions, under a range of scenarios, assists in developing New Zealand's climate change policy.

Quality

All published material will be subject to peer review, with no significant errors or omissions being detected by users.

Timeliness

All material will be produced according to specified deadlines.

Costs: Vote Energy, Output Class D4

	Forecast 2002/2003	Supplementary Estimates 2001/2002	Estimated Actual 2001/2002
	$000	$000	$000
Revenue Crown	266	303	303
Third Party Revenue	936	936	936
Expenses	1,193	1,230	1,230
Surplus/(Deficit)	9	9	9

¹⁹Combined standard for audits, inspections and investigations in 2001/2002.

²⁰The range is (1) very dissatisfied, (2) dissatisfied, (3) satisfied, (4) very satisfied.

Jump to main page content.

Printed: 25/11/2009