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• Vote: Energy

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Output Class > Policy Advice on Energy and Resource Issues

This output class provides policy advice on the effective operation of energy and resource markets (electricity, oil, gas, geothermal, coal, minerals and other natural resources). The following outputs are included in this output class for 2006/2007.

• National Energy Strategy - which relates to leading the development of a national energy strategy. The development of the strategy will involve leading a whole-of-government process and significant engagement with stakeholders and the wider public. This output has strong linkages with providing advice on climate change policies for the energy sector, and the replacement of the National Energy Efficiency and Conservation Strategy (NEECS).
• Electricity - which relates to monitoring and advising the government on effective governance and operation of the electricity market and implementation of regulations as required. In particular, it will seek to ensure that electricity industry arrangements and policy settings promote reliability, good environmental outcomes, and efficient and fair prices, focusing on:
  • effective management of security of supply, including dry-year risk (both short- and long-term);
  • effective wholesale and retail competition;
  • effective governance of the electricity sector; and
  • efficient line services (including transmission security and efficient prices).
• Fuels and Crown Resources - which relates to monitoring and advising the government on effective operation of the gas and oil markets, including fuel quality and implementation of regulations as required. The output also involves advice on the allocation and management of natural resources, particularly Crown-owned resources, and Treaty of Waitangi claims in respect of natural resources. An area of focus will be in ensuring that gas industry governance and market arrangements are implemented by market participants to promote a smooth transition to the post-Maui environment, focusing on:
  • security of supply in the gas sector;
  • effective governance of the gas sector;
  • effective gas industry arrangements, rules and regulations; and
  • improving the regulatory environment on gas pipelines.
• Energy and the Environment - which relates to contributing to policy advice on the development of a response to New Zealand's climate change obligations under the Kyoto Protocol, monitoring and providing advice on plans and policies under the Resource Management Act 1991 (RMA), and contributing to the development of policy advice for freshwater. Key areas of focus include:
  • participating actively in the development of advice on the domestic climate change policy package, as co-ordinated by the Ministry for the Environment (Climate Change Office);
  • participating actively in the inter-departmental process relating to the development of policy advice for freshwater; and
  • monitoring and advising on policies and plans under the RMA with respect to their potential impact on significant energy developments, infrastructure and renewable energy sources.

Service Performance

Policy advice will be delivered as agreed with the Minister and as detailed in the Ministry of Economic Development Output Plan.

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.

Costs: Output Class - Policy Advice on Energy and Resource Issues

Output Class > Management of the Crown Mineral Estate

This output class provides services relating to the development and management of the Crown's petroleum and mineral resources, comprising all in-ground petroleum, gold and silver, and approximately half of the coal and other minerals. The three principal services provided under this output are:

• allocation of interests in the Crown mineral estate and monitoring ongoing regulatory compliance;
• promoting international investment in exploration and production; and
• providing policy advice on matters affecting the Crown's interests in petroleum and minerals.
• Permit Allocation and Regulatory Compliance - which provides an efficient and effective management regime for the exploration of petroleum, mineral and coal resources, including allocating and managing prospecting, exploration and mining permits; managing the geotechnical resource data; and collecting all royalties, levies and fees payable to the Crown.
  • Quantity
    • Process an estimated:
      • 190 (175) permit applications; and
      • 200 (250) permit change applications including surrenders, extensions of land/duration and transfers.
    • Estimated Crown revenue collected:
      • Royalties - $52.1 ($47.1) million; and
      • Energy resource levies - $71.5 ($71.5) million.
  • Quality
    • Petroleum and mineral permits (including licences) will be monitored for compliance with work programme conditions to maintain the integrity of the allocation system by conducting on-site field inspections on:
      • 40 (35) mineral/coal mining permits; and
      • 30 (25) mineral/coal prospecting and exploration permits.
    • A minimum of 25 (15) compliance audits of energy resource levy or royalty payers will be undertaken and any shortfalls pursued.
  • Timeliness
    • 90% (90%) of new permit applications that are priority one²² (including changes to area, minerals and duration) will be processed within five working days following receipt of the Land and Minerals Status Report, completion of iwi consultation, and all other permit holder obligations.
    • 100% (95%) of permits with outstanding fees or royalty obligations will have compliance action commenced within one month of due date.
• Petroleum and Minerals Investment - which relates to promoting New Zealand for international and domestic investment to enable the Crown's petroleum and mineral resources to contribute to the economic development of New Zealand. Key areas of focus include:
  • identifying and pursuing overseas organisations likely to invest in exploration and production, particularly in oil and gas;
  • promoting relevant financial, geo-technical and other investment data; and
  • promoting New Zealand's petroleum and mineral resources at key international conferences.
  • Quantity and timeliness
    • Conclude two (three) block offers in offshore petroleum basins by 1 April 2007.
    • Develop and implement a marketing and promotions plan for minerals by 30 September 2006.
• Petroleum and Minerals Policy - which provides policy advice on the management of the Crown mineral estate, including periodic reviews of the Crown Minerals Act and preparation of minerals programmes and regulations prescribed under the Crown Minerals Act 1991. Key areas of focus include:
  • conducting a review of the Crown Minerals Act by 31 December 2006; and
  • conducting a review of the Minerals Programme for Petroleum and implementing any approved changes by 30 June 2007.

Costs: Output Class - Management of the Crown Mineral Estate

Output Class > Administration of Gas and Electricity Regulations

This output class provides advice on the administration of gas and electricity safety and associated policy work, and administers regimes on supply, quality and measurement for gas and electricity safety; petroleum quality monitoring; electrical worker licensing; and information disclosure for the gas industry.

Service Performance

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

• Energy Safety Advice - which relates to providing advice on energy safety issues associated with the safe supply and use of gas and electricity. The key areas of focus include:
  • providing support for the passage of the Energy Safety Review Bill and the Energy (Miscellaneous Matters) Amendment Bill (LPG levy) in accordance with the legislative timetable; and
  • reviewing and amending the Electricity Regulations 1997 and the Gas Regulations 1997, in particular as required by the Energy Safety Review Bill when passed into legislation.
  • Quality
    • Generic quality performance measures for policy advice, Ministerial services and briefings as detailed in the Ministry of Economic Development's Quality Standards for Policy Advice and Ministerial Servicing will apply to this output.
• Energy Safety Enforcement and Conformance - which relates to operating an effective investigation, compliance, enforcement and communication regime for gas and electricity safety, including reviewing and implementing changes in legislation, regulations and standards.
  • Quantity
    • 80²³ (80) audits of networks and distribution systems, and installations and appliances will be undertaken.
    • 50-70 (30) significant gas and electricity accidents and incidents, where there is serious injury or loss as defined in section 16 of the Electricity Act 1992 and section 17 of the Gas Act 1992,²⁴ are expected to be investigated.
  • Quality
    • Electrical and gas safety representative organisations surveyed rate, on average, that they are (3) satisfied to (4) very satisfied with the Energy Safety Service's performance, as evidenced by an annual survey.²⁵
  • Timeliness
    • 90% (90%) of audit and inspection reports will be completed within 30 (30) working days of the audit or inspection.
    • 90% (90%) of accident investigations will be responded to and action commenced within 24 (24) hours of notification of the accident.
• Petroleum Monitoring - which relates to monitoring the quality of petroleum to ensure its safety.
  • Quantity
    • The Ministry will oversee the testing of a minimum of 90 (90) sample sets in accordance with a statistically-based sampling plan to meet the requirements of the Petroleum Products Specifications Regulations 2002.
  • Quality
    • All testing laboratory reports on petroleum quality will be reviewed monthly to ensure that appropriate action has been taken on the test results and report recommendations.
  • Timeliness
    • 95% (95%) of analysis of results from petroleum testing laboratories and recommendations will be completed within 15 (15) working days from receipt of reports.
• Electrical Workers Licensing - this output involves:
  • Quantity
    • Expected numbers:
      • Action an estimated 400 (1,000) electrical workers registrations.
      • Issue an estimated 11,000 (20,500) practising licenses.
    • Conduct an estimated:
      • 600 (3,000) electrical audits; and
      • 40 (200) competency audits of electrical workers who hold a provisional licence and/or are supervised trainees.
    • Note: The administration of the Electrical Workers Licensing Regime is to transfer from the Ministry of Economic Development to the Department of Building and Housing from 1 September 2006. These quantities are based on projections for the two-month period to 31 August 2006.
  • Quality
    • All referrals to the Electrical Workers Registration Board are approved and all legislative requirements are met.
  • Timeliness
    • Licensing and registrations
      • 95% (95%) of correctly completed practising licence applications will be processed within 10 (10) clear business days of receipt.
      • 95% (95%) of correctly completed registration applications (New Zealand-based trainees) will be processed within 10 (10) clear business days of receipt.
      • 65% (65%) of correctly completed overseas registration applications will be processed within 10 (10) clear business days of receipt.
    • Complaints
      • 70% (70%) of complaints against registered electrical workers will be processed to notification of the Complaints Assessment Committee decision (subject to external parties, e.g. legal intervention) within 18 (18) weeks.
      • 70% (70%) of complaints against registered electrical workers will be processed to notification of the Board's decision (subject to external parties, e.g. legal intervention) within 15 (15) weeks.
• Information Disclosure - this output involves:
  • Quantity and timeliness
    • Annual compliance checks of all gas information disclosures will be undertaken, with 80% (80%) of checks completed within 60 (60) working days of their receipt by the Ministry.
    • Any cases of non-compliance will be followed up with the companies concerned within 30 (30) working days of the non-compliance being detected, with the aim of achieving full compliance within 120 (120) working days of the detection. (Note in some cases it is possible that prosecution could be required in order to achieve full compliance, and as a result there could be a considerable delay before full compliance is achieved.)
  • Quality
    • All financial information disclosures will be accompanied by an audit certificate.
    • All information disclosures will be accompanied by a declaration form completed by a director of the company concerned.
    • All information entered into the Ministry database will be subject to validation checks for accuracy and completeness.

Costs: Output Class - Administration of Gas and Electricity Regulations

Output Class > Provision of Climate Change Unit Register and Information

This output class provides services relating to the development, implementation and operation of a register to enable the allocation and trading of emission units under the Climate Change Response Act 2002. This Act was passed in order to meet New Zealand's obligations under the Kyoto Protocol which came into force on 16 February 2005. The first Commencement Period will start on 1 January 2008 and the register must be available for international audit in September 2006.

Service Performance

The key areas of focus in 2006/2007 will include:

• development of the software needed to support the register by 1 September 2006 (the register will not be publicly launched until the United Nations Framework Convention on Climate Change (UNFCCC) has initialised the International Transaction Log (ITL) in 2007;
• implementation of the connection to the ITL in 2007; and
• input into the Registry System Administrator (RSA) Forum co-ordinated by the Secretariat of the UNFCCC.

Implementation of the register will be in accordance with the Ministry of Economic Development standards and practices for information technology projects. This work will also need to comply with the international requirements for national registers as specified by the UNFCCC in their technical documentation.

Costs: Output Class - Provision of Climate Change Unit Register and Information

Output Class > Energy and Resource Information Services

This output class covers the provision of information and technical advice on energy and resources, the management of the response to any international disruption in oil supplies, and the management of New Zealand's energy-related international relationships.

Service Performance

Outputs in this output class will be delivered as detailed in the Ministry of Economic Development Output Plan and include:

• updating and publishing Energy Data Files, the Energy Sector Greenhouse Gas Inventory Report, and the Energy Outlook;
• updating and publishing crude oil, petrol and diesel prices;
• managing New Zealand's response to any international disruption to oil supplies; and
• managing New Zealand's international energy relationships.

Quality

Generic quality performance measures for policy advice, Ministerial services and briefings as detailed in the Ministry of Economic Development's Quality Standards for Policy Advice and Ministerial Servicing will apply to this output class.

All material produced for publication will be reviewed for completeness and accuracy prior to publication in accordance with internal systems and procedures and, where relevant, international requirements.

Timeliness

All publications and briefings will be produced to deadlines specified in the Ministry of Economic Development Output Plan.

Costs: Output Class - Energy and Resource Information Services