• Home
• Energy & Resources
• Environment
• National Guidance
• Archive
• Electricity Transmission
• Report of the Reference Group
• Executive Summary

• Environment

• National Guidance

• Archive

• Electricity Transmission

Background

In January 2005, the Government established a reference group to advise on the feasibility and merits of a national policy statement (NPS) and/or national environmental standards (NESs) to address issues associated with the management of electricity transmission under the Resource Management Act (RMA).

This is part of a wider work programme that will see government agencies investigating ways to address a range of infrastructure issues. The focus on greater national direction is also consistent with the Government's policy response to improve how the RMA works in practice.

NPSs and NESs are two of the principal ways central government can provide guidance on resource management decision-making that is otherwise almost entirely devolved to local government.

NPSs and NESs

NPSs can set out objectives and policies that local authorities must "give effect to" in their local and regional policies and plans, and which they must have regard to when making decisions on individual development projects. NESs are regulations that can over-ride local and regional rules. They can specify the performance standards required in relation to specific activities, or specify how particular activities are to be regulated at the local or regional levels.

The Government can use NPSs or NESs when there are matters of national significance at stake and where it can be demonstrated that they are the most appropriate mechanisms having regard to their efficiency and effectiveness. Before it can adopt either an NPS or an NES, the Government must carry out an evaluation to demonstrate that the statutory "cost benefit" tests of section 32 of the RMA are met. This report is a contribution to that evaluation.

Electricity Transmission

For the purpose of this paper the term "transmission network" is used to refer to the "grid" as defined by the Electricity Governance Rules (2003). That definition refers to:

the system of transmission lines, substations and other works, including the HVDC link² used to connect grid injection points and grid exit points to convey electricity throughout the North and South Island of New Zealand.

That definition does not include distribution lines owned and operated by distribution companies.³

Transmission has a range of adverse environmental effects, particularly at the local level where impacts on landscapes and the natural character of the coast can be particularly controversial. Concern is also frequently expressed about electric and magnetic fields and noise.

Management of Transmission and the RMA

The management of transmission under the RMA seeks to avoid, remedy or mitigate these environmental effects. There are several ways transmission (or activities associated with transmission) can be authorised under the RMA. Most other network infrastructure is authorised by a designation (a particular form of land use authorisation available to certain network utilities) and/or resource consents.

Because of the way the transmission network was developed and managed under past regulatory regimes, most of the existing transmission network is not formally designated in district plans, nor does Transpower hold resource consents. While Transpower could have sought designations for existing lines at any stage since 1991 it has not chosen to do so. The network continues to operate under a combination of existing use rights and a patchwork of various and inconsistent enabling provisions in district plans.⁴ Under existing land use rights, Transpower may continue to carry out any activity lawfully established provided the effects on the environment remain the same or similar in character intensity and scale. Transpower proposes to seek formal designations for any new lines it may build in the future.

Transmission and Access to Land

The transmission network also occupies private property and so in addition to a land use authorisation, Transpower requires a right of occupation and access, sometimes referred to as a property right.

Property right issues are governed by the Electricity Act 1992 which distinguishes between transmission lines constructed pre 1988 and lines constructed since 1 January 1988. For pre 1988 lines, Transpower need not have individual agreements with landowners. It is entitled to continue to occupy private land and may operate, maintain and upgrade existing lines provided any upgrade does not injuriously affect the land.

The Electricity Act does require Transpower to negotiate access with individual property owners for any new line (including upgrades that would injuriously affect the land) built since 1 January 1988. Transpower does this by entering into easement agreements. These agreements set out the rights and obligations of both parties including, notably, the restrictions that apply to what a landowner may do within the easement corridor (so as to protect lines) and the compensation that is payable to landowners for losses suffered.⁵ (Compensation may address the aesthetic impact and the permanent disturbance to the use or management of the land).

The Electricity Commission

The Electricity Act (Electricity Amendment Act 2001) also established the Electricity Commission which has the role of determining whether or not to approve transmission investments proposed by Transpower. Electricity Commission approval provides Transpower with a regulated ability to recover its full economic costs on the basis of the Electricity Commission approved transmission pricing methodology from transmission customers. In deciding whether to approve (or not), the Electricity Commission evaluates proposed transmission investments against alternatives by the application of a net market benefits test.⁶

Issues with the Management of Transmission under the RMA

The history and development of the transmission network and its distinguishing characteristics raise a number of issues for the management of transmission under the RMA.

The special characteristics of transmission include:

• the costs of transmission are located within a different jurisdiction to the benefits (i.e. there are local costs but mainly non-local benefits);
• the transmission network is extensive and linear, making it particularly vulnerable to local variation in the policy and regulatory approaches of local authorities; and
• shifting electricity economically over large distances requires pylons, conductors (lines) and cables. This means there is a direct and often unavoidable trade-off between local environmental effects and electricity transmission.

Issues relating to the management of transmission under the RMA may be organised around the following themes:

1. the consideration to be given to the benefits of transmission in RMA decision-making (in addition to local costs);
2. the management of the effects of activities on the transmission network (including issues arising from uncertainty about affected landowners' existing use rights and obligations in respect of undertaking potentially incompatible uses);
3. the management of certain adverse effects of transmission - especially, visual amenity, electric and magnetic fields, noise, and cultural, archaeological, and biodiversity impacts (including issues arising from uncertainty about Transpower's existing use rights and obligations in respect of maintaining existing lines); and
4. the processes and practices that should be used to manage transmission projects.

Selection of Policy Options

The broad policy options available to the Government to address the identified issues include legislative change, non statutory guidelines, submissions on plans and individual projects, call-in of applications, and NPSs and NESs. These options are evaluated in section 6.1.

An evaluation of the policy options indicates that NPSs and NESs are applicable as indicated in the following table.

Other policy options are also potentially applicable in respect of the issues identified in the table above. However, options such as submissions and call-in are applicable to individual projects and do not change the policy framework within which decisions must be taken. In addition, options such as guidelines and submissions provide a lower level of certainty about outcomes.

It is important to note, however, that NPSs/NESs and options such as guidelines, submissions and call-in, are not mutually exclusive. These mechanisms could be used in conjunction with one another, but in any event it seems that an NPS and/or NES could be part of an effective response to the issues identified. Indeed, an NPS might well allow other mechanisms to be used more effectively.

There are few options outside of the RMA that could be effective in addressing the issues as described. Better enforcement of New Zealand Electrical Code of Practice for Electrical Safe Distances (NZECP 34)⁷ as part of the building permit process is one viable option. This option appears to have merit in its own right and warrants follow-up by the relevant departments and parties. However, it only solves some aspects of one of the issues and is not therefore a substitute for an NPS or NESs.

Most of the process and practice matters are not listed in the table above as they do not lend themselves to resolution through either an NPS or NES. These are better addressed by other means. In particular, there is a need for non statutory guidelines and an amendment to the Resource Management Act (Forms, Fees and Procedures) Regulations 2003⁸ to address some of the process and practice issues.

Evaluation of Possible NPS and NES Content

A more detailed scoping and evaluation of the effectiveness of, and efficiency of the possible contents of a NPS, suggests the following.

Positive Effects of Transmission

An NPS could contain objectives and policies in relation to positive effects that:

1. require district and regional plans and policies to recognise the transmission network as a nationally significant activity; and
2. require local authorities to consider the extent that certain specified positive effects might accrue from a proposed transmission project (as well as local environmental, social and economic costs).

Such policies could have:

• moderate to low costs for local authorities which would need to change their district and regional plans to give effect to the policy. The cost would depend on the detail of the policy design (and, in particular, whether the NPS requires immediate compliance, allows a phased-in transition or allows the policy to be incorporated without use of the First Schedule⁹ process);
• some additional costs on Transpower which might be required to provide (and pay for the review of) information about the potential positive impact of transmission projects. This is unlikely to be a major additional cost as Transpower must already assemble this information for other purposes; and
• some level of environmental cost if the policies caused transmission projects to proceed that might otherwise not. These costs are not expected to be significant.

The benefits produced by the policies could include:

• a reduction in the effort and cost Transpower must expend in arguing for appropriate recognition for the transmission network with individual local authorities; and
• Transmission projects could proceed through the RMA's regulatory processes more easily than they otherwise might.

The Reference Group is satisfied that the relatively low environmental and compliance costs are likely to be outweighed by the increased certainty in the policy framework and fuller consideration of the benefits and costs of transmission.¹⁰

Managing Adverse Effects on Transmission

An NPS could contain objectives and policies in relation to the management of adverse effects on the transmission network that require district and regional plans to recognise and protect the transmission network. Such a policy could:

1. be general or specific, and if it is specific it could;
2. specify the effects to be avoided, remedied, or mitigated (such as dust accumulation, restriction of access) or the activities to be controlled (such a quarrying or building in proximity to pylons); and
3. if activities are to be the focus, parallel the provisions proposed under the draft model easement agreement negotiated between Transpower and Federated Farmers; and

An NPS cannot, however, require the control of activities through the use of rules and resource consents. If greater certainty of control is required, an NES could be developed. This could reflect, in the RMA framework, some of the controls already in place under the existing New Zealand Electricity Code of Practice 34: 2001 (which specifies minimum distances between buildings and other structures, and works, and power lines).

An NES of the type described above could be promulgated instead of specific policies in an NPS, or in addition to a policy in an NPS.

Weighing all the various costs and benefits, the Reference Group considers that the most appropriate way forward is an NES based on some of the key provisions of NZECP 34.

That option represents low public and private compliance costs since:

1. district and regional plans would not have to be changed; and
2. the NES would be based on existing mandatory requirements (but those requirements would be put into a framework that has better enforcement).

The Reference Group also considers that the option deals with the majority of risks likely to arise while not exacerbating existing landowner concern about uncompensated loss of property rights.

Accordingly, the Reference Group is of the opinion that that the option described offers the most efficient approach having regard to appropriateness and the relative benefits and costs.

Both Transpower and Federated Farmers hold, for different reasons, differing views. Transpower would prefer an NPS (in addition to an NES) that contains a broader obligation on local authorities to control any activity that might potentially affect the transmission network. Federated Farmers, on the other hand, believes that the RMA should not impose controls over and above those mutually agreed by Transpower and landowners through the negotiated easement process. The majority of the Reference Group considers that the option described is a reasonable compromise and way forward.

An additional policy that the Reference Group believes would have merit would promote the depiction of existing transmission lines on planning maps. This would likely have low cost and significant benefit in terms of improving the awareness of local authorities and potential applicants about the potential effects on transmission and the risk of electrical hazard.

Managing Adverse Effects of Transmission

Four issues need to be addressed:

• managing activities with low environmental impact;
• managing visual, cultural/archaeological and biodiversity impacts;
• managing noise; and
• electric and magnetic fields (EMF).

Activities with Low Environmental Impact

An NPS could contain objectives and policies that require local authorities to identify and provide for activities associated with transmission that do not have significant environmental effect. This could be done generally or specifically by listing those activities.

Neither option provides any certainty that district and regional plans will provide for low impact activities as permitted activities.

Greater certainty could be provided by way of an NES that specified certain activities as permitted activities and/or which specified the consent categories for certain activities.

The cost of an NES as described is difficult to assess since, at this point the details of what it might be permitted have not been worked through. Also, little analysis has been carried out regarding what is currently permitted on a district by district basis. Existing plan provisions are variable and discretionary. The marginal cost and benefits of the NES as described is therefore difficult to determine.

Although there is considerable uncertainty, it is clear that an NES permitting specific activities would have little compliance cost for local authorities. The best information available also suggestions that, provided the NES is based on the existing practices of the majority of local authorities, there would be little additional cost for Transpower or the environment. There could, however, be significant benefit in the form of greater certainty about what activities are and are not acceptable for Transpower to undertake without resource consent.

Care will have to be taken, however, that unintended consequences are not created for the land access regime.

Visual, Cultural, Archaeological and Biodiversity Impacts

An NPS could specify the areas, sites and values that transmission lines should, wherever possible, avoid so as to minimise visual and land disturbance impacts on amenity (including landscape), cultural, archaeological and biodiversity values.¹¹

Overall, the Reference Group assesses the policy as having low cost and probably also moderately low marginal benefit. Whether the benefits of the policy exceed the costs depends on the specific wording, and the extent to which that wording would generate more or less uncertainty and debate.

The Reference Group considers that further analysis is required to determine whether a national level instrument can provide the guidance sought but suggests that, as the policy addresses critical issues, it be included in a draft NPS for public comment. If, after further consideration, it is determined that an NPS policy on visual (and other) impacts cannot add value, other mechanisms (including perhaps a non statutory guideline) could be investigated.

Noise from Substations

An NPS could require local authorities to manage the reverse sensitivity associated with noise from substations by establishing noise contours and ensuring developers of noise sensitive activities take responsibility for compliance with maximum noise exposure limits.

The Reference Group's overall assessment is that the costs of such policy could be high and the size of the benefits uncertain. The policy could, however, be effective in addressing the core issues and further work on identifying the costs and benefits relating to both new and existing substations is warranted.

Electric and Magnetic Fields

An NES could set standards in relation to electric and magnetic fields. This would have the clear benefit of reducing uncertainty around the application of existing guidelines.

The Reference Group is satisfied that an NES on electric and magnetic fields has merit. However it believes that the NES development process should not commence until the Minister for the Environment has sought and received advice from the Minister for Health on a suitable EMF standard for New Zealand. Such a standard is likely to be influenced by the variety of international developments and revisions of guidelines that are currently taking place.

Overall Conclusion

The appropriateness (including the efficiency and effectiveness) of the possible policies and standards identified in this report is difficult to evaluate quantitatively, and will depend on the specific wording of any NPS and NESs.

However, the Reference Group considers that there are likely to be net benefits in the development of an NPS for transmission that contains policies that do some or all of the following:

• accord nationally significant status to the transmission network;
• require local authorities to consider the positive national effects (in addition to local adverse effects) of transmission when making decisions on resource consents and recommendations on notices of requirement;
• require local authorities to consider the adverse effects on the transmission network when assessing resource consent applications for activities in close proximity to transmission lines;
• encourage local authorities to manage the visual, cultural, archaeological and biodiversity impacts of the transmission network by way of ensuring Transpower avoids inappropriate routes; and
• encourage local authorities to manage reverse sensitivity associated with noise from the transmission network's substations.

In addition, the Reference Group considers that NESs should be developed to complement the NPS. These NESs should specify:

• the transmission activities that should, and should not, be permitted as of right (i.e. those activities for which no resource consent is required);
• which of the various activities that might affect the transmission network should be prohibited and/or require resource consent. (This should be based on key mandatory restrictions already included in NZECP 34); and
• standards in relation to electric and magnetic fields associated with the transmission network.

This report includes indicative wording to guide the drafting of a proposed NPS but further work will be required before either an NPS is formally notified under section 48 of the RMA, or NESs are recommended under section 44 of the RMA. Public submissions received on a draft of this report yielded specific feedback that will be useful for drafting the NPS and NESs.

Drafting proposed NPS and NESs will enable, and require (pursuant to s32 of the RMA), more detailed evaluation of the expected costs and benefits of promulgating the proposed NPS and NESs. This in turn will facilitate further public consultation on whether the government should proceed to provide national guidance on electricity transmission.

Finally, it is important to reiterate that an NPS and NESs are not about individual projects but relate to the overall policy and regulatory framework within which individual projects and local planning regimes are considered. It is also important to be realistic about what NPSs and NESs can and cannot do. The Reference Group considers that well-prepared NESs and a NPS should improve certainty for all parties and reduce transaction costs, but other policy options available to the government, such as submissions and call-in, will remain important. Furthermore, the task for local decision-makers of weighing the costs and benefits of individual projects will remain difficult and contentious.