4. Electricity Transmission
4.1 Historical Development of the Transmission Network
Although New Zealand's first 110 kV line was built as early as 1924, the development of the national grid as we know it today started with the first 220 kV line between Auckland and Wellington in 1953 - a line that forms the backbone of the modern national grid. By the late 1950s, a 220 kV line had been constructed in the South Island linking Roxburgh in the south to the Nelson district. The first stage of the high voltage direct current (HVDC) line and the Cook Strait cable was completed in 1965 creating the first true "national grid".
Although the 1950s and 1960s saw the bulk of the network constructed, the network continued to expand during the 1970s-1980s to serve the South Island's hydro schemes and the growing demands of the north of the North Island. In 1988-1990 the Stratford to Huntly line was developed. That was the most recent 220 kV line to be built of significant length and complexity.19
In short, for the past two decades, the 17,041 km of transmission lines, 42,000 towers and poles, and 172 substations and switchyards that is the national transmission network,20 has been managed largely on a maintain and upgrade basis. Very few new lines have been completed since the RMA was enacted in 1991, and few in the decade preceding that.
The backbone of the network has a 220 kV capacity, although the network also comprises lines operating at 110 kV, 66 kV and 50 kV.
Transpower advises that, with significant growth in demand for electricity experienced in recent years,21 and in the absence of new generation capacity close to centres of demand, the "maintain and upgrade" approach is no longer tenable for some regions, and the development of new lines is again being planned (see section 5.3 for details).
4.1.1 Ownership and Operation of the Transmission Network
The early development of the national transmission network was undertaken by the New Zealand Electricity Department (NZED).
NZED became the Electricity Division of the Ministry of Energy in 1978, and in 1987 it became the state owned enterprise Electricorp, later the Electricity Corporation of New Zealand (ECNZ).
ECNZ had responsibility for the generation and retailing of electricity and transmission via the national transmission network (local distribution remained the responsibility of local electricity supply companies).
In a 1991 restructuring, Transpower became a subsidiary company of ECNZ until its functions were separated from ECNZ in 1994.
Transpower New Zealand Limited ("Transpower") is now a state owned enterprise in its own right within the meaning of the State Owned Enterprises Act 1986. It has sole ownership and management responsibility for the national transmission network.
Distribution of electricity from the transmission network's substations to consumers is carried out by distribution companies including Vector, Orion, Powerco and Unison.22
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 link23 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 electricity conveyed through the distribution lines owned and operated by distribution companies. Distribution lines have a local rather than national role. The community interest is therefore local rather than national. Furthermore, the environmental impacts of distribution lines tend to be less significant than transmission lines.24
When, in this paper, reference is made to Transpower, it is because Transpower is the sole player in the transmission business as defined. There is no intention to single out Transpower for preferential treatment. If there was to be national intervention in the way transmission is managed under the RMA that intervention would apply to any proponent of a transmission project. The current reality is that, at this point in time (and as far as the Reference Group is aware, into the foreseeable future), Transpower is the only transmitter of electricity.
4.2 Adverse Environmental Effects of Transmission
Transmission lines, pylons and substations can generate a range of adverse effects on the environment. These may be summarised as follows.
4.2.1 Impacts during Development Phase
Adverse impacts during the development phase relate principally to the construction and use of access roads, tracks and platforms/foundations for pylons and substations. They include:
- earthworks and associated sediment;
- traffic impacts on local roads including safety issues;
- generation of dust and noise;
- disturbance to biodiversity from tracking in areas of indigenous vegetation (including habitat fragmentation and introduction of weeds); and
- disturbance of historic heritage.25
4.2.2 Impacts Once Developed
Once in place, transmission infrastructure can have the following adverse effects:
- visual impacts on local amenity values including rural character;
- visual impacts on regionally or nationally significant landscape values and natural character of the coast;
- electric and magnetic fields;
- loss or degradation of taonga;
- noise from substations;
- noise from lines (corona);
- lightspill from substations;
- biodiversity impacts associated with habitat fragmentation, vegetation clearance (and edge effects26) and bird strike.
- discharges of contaminants (especially zinc) arising from the cleaning of structures;
- requirement for tree pruning;
- risk to public safety (potential for contact with lines and conductors);
- risks associated with the presence of hazardous substances in substations (e.g. oils in transformers); and
- risks to aviation (e.g. crop spraying by helicopters and top-dressing by fixed wing aircraft).
Of course, not all these effects are of equal significance. It is the nature and scale of long term impacts on which approval typically hinges. Of these, experience has shown impacts on landscape/rural character and amenity values to be, by far, the most controversial.
4.2.3 Impacts on Future Land Use under and Adjacent to Lines
A separate category of effect that arises once transmission lines are established relates to impacts on individuals whose land is traversed by transmission lines.
The presence of lines can limit the land uses and land use practices within a corridor under the lines. Lines can interfere with some farming practices and limit some rural diversification options. They can also foreclose some urban development options.
4.3 Transmission and the RMA
4.3.1 Authorising Transmission Infrastructure under the RMA
Because transmission can have adverse environmental effects, local authorities control transmission under the RMA. Under the RMA there are three ways in which transmission infrastructure (and associated activities) can be authorised.
- Transpower can apply for resource consents to undertake works on existing lines, or for the construction of new lines. A land use consent might be required from the relevant district council(s). If activities are proposed in the beds of lakes or rivers, or in the coastal marine area, or if earthworks or discharges are involved, consent might also be required from the relevant regional council(s).
- Transpower is a requiring authority27 and as such is entitled to serve a notice of requirement on a district council to have a designation28 included in a district plan.
Once a designation is included within a district plan, the requiring authority need not apply for a resource consent for the activity in respect of which the designation is made. However, designations only authorise land use. They cannot authorise activities controlled by regional councils such as earthworks, discharges, or the occupation of river beds or the coastal marine area. If a transmission project involves those activities, resource consents would be required from relevant regional council(s).
- Neither a designation nor a resource consent is required if the activity is specifically provided for as a permitted activity in the relevant district or regional plan. Plans can permit activities, or permit them subject to compliance with specified performance standards (conditions).
Plans are drafted by local authorities according to a process prescribed in the RMA. Transpower can either make a submission on a proposal requesting that specific provision is made for transmission, or, it can apply to have an existing (operative) plan changed (through the private plan change process) to permit or otherwise provide for transmission activities.
In addition, Transpower can apply to the relevant local authority for a certificate of compliance to confirm that its activities comply with the relevant district plan or have existing use rights.
4.3.2 Transpower's Current Approach to "New Build" Projects
Transpower's strategy to authorise major new transmission lines under the RMA involves use of the designation process. From a utility provider's perspective, this process has a number of advantages over the resource consent process.
- As a requiring authority, Transpower can give notice to a territorial authority of its requirement for a designation. Although the territorial authority conducts a process similar to that used for notified resource consents, it only has the power to make a recommendation to Transpower about whether a project should proceed. Transpower, as the requiring authority, makes the decision regarding whether to accept a territorial authority's recommendation.
- Once a designation is in place, no landowner whose land is subject to the designation can, without the approval of Transpower, do anything on land designated that might prevent or hinder the work in respect of which the designation is made.
- Designations are identified in the relevant district plan(s) so people can see where they exist and who is affected by them. This informs local authorities, potential resource consent applicants, and the public generally, about where infrastructure exists, or is proposed. They can then take that information into account when determining (for example) who might be affected by a new development proposal, or what the effects on infrastructure of any such proposal might be.
- Once land is designated, an affected landowner can apply to the Environment Court to require the designating authority to acquire or lease all or part of the owner's estate or interest in the affected land. This provides protection for landowners who might otherwise be exposed to the effect of a designation for years (or even decades) ahead of the work being undertaken.
Although the designation process is Transpower's preferred approach, it may well seek resource consents for smaller, perhaps unanticipated, projects. In addition, Transpower occasionally takes ownership and control of lines for which resource consent has been obtained by electricity generation companies.
4.3.3 Transpower's Approach to Maintenance and Upgrade Projects
Regardless of whether new lines are constructed in the future, Transpower will need to maintain, repair and upgrade its existing lines and substations.
Transpower's approach to gaining authorisation for these activities is as follows:
- to rely on existing use rights as much as possible. (Existing use rights are land use rights guaranteed under section 10 of the RMA that allow a use to continue even though a district plan may not allow that use, provided it was legally established and the effects remain the same or similar in character, scale and intensity);
- to have minor upgrading activities permitted in district (and regional) plans; and
- to seek resource consents when existing use rights and/or permitted activity rules do not provide for required activities.
To facilitate the strategy outlined above, Transpower has been seeking, through district and regional plan development processes, to ensure that:
- there is certainty and consistency about how transmission activities will be dealt with;
- controls that are included in plans are reasonable and based on the effects of the activity;
- the positive effects of transmission are acknowledged; and
- activities with little or minor adverse effects are permitted.
4.3.4 Status of Existing Transmission Infrastructure
Part of the reason why Transpower needs to be heavily involved in district and regional plan development, is because of the unusual situation it finds itself in with respect to the status of its existing transmission infrastructure.
As noted earlier, the transmission network was developed largely in the 1950s-1960s. During that period, transmission had a form of exemption from local planning restrictions that might otherwise have been imposed under the Town and Country Planning Acts of 1953 and 1977.29
The enactment of the RMA in 1991 changed that regulatory environment, making transmission subject to the same processes as other utility and network operations (and similar to the processes required for any other activity). However, transmission continued to enjoy a transitional arrangement under section 375 of the RMA that meant that transformers and lines up to 110 kV, with a capacity up to and including 100 MVA, were deemed to be permitted until such time as new plans were prepared under the RMA. Transformers and lines for conveying electricity at a voltage exceeding 110 kV and a capacity exceeding 100 MVA, were deemed to be discretionary activities requiring a resource consent from relevant local authorities.
All territorial authorities have now notified district plans under the RMA, effectively ending the transition period provided for by the RMA. Transpower's lines, and on-going activities in relation to those lines, are now subject to the same requirements as other activities controlled by the RMA.
As a result of this historic approach to regulating transmission, Transpower is now left with lines that, with few exceptions, are not designated, do not have resource consents, and are not well provided for in district plans. This means that, in RMA terms, many activities are authorised by existing use rights only.
The legal status of the transmission network is, in that respect, very different from other network utilities such as roads and rail which operate within designations originally made under previous legislation and continued under the RMA.30
4.3.5 Transpower As a Requiring Authority
Transpower was made a requiring authority in December 1992. This enables it to lodge notices of requirement for designations for all its existing lines. Had designations been made, many of the issues identified in this report may not have arisen and the need to consider an NPS or NES would have similarly reduced.
Transpower designating existing lines is therefore an underlying option to resolve some of the issues set out later in this report. However, it is an option available to Transpower. It is not an option available to the Government, except by way of legislation to deem designations to exist. This option is discussed in Appendix 3.
The option of seeking designations is unlikely to be attractive to Transpower. It would have to make its case to some 72 local authorities (the 17,041 km transmission network crosses all territorial authorities except Banks Peninsula and Chatham Islands) and would incur significant transaction costs in doing so. Furthermore, designations raise the potential for landowners to require Transpower to purchase an interest in designated land.31 As discussed in section 4.4.2, the Electricity Act 1992 means that Transpower did and does not have to secure an interest in designated land for its existing (pre-1988 lines) provided it does not change the use of the lines (through upgrades) in such a way as to injuriously affect the land.
4.3.6 Strategic Land Use Planning Role of Regional Councils
Traditionally, the role of regional councils in electricity transmission has been mainly focused on regulating the adverse effects of transmission (in terms of discharges, earthworks, and the disturbance and occupation of the surface of lakes and rivers and the coastal marine area).
However, the Resource Management Amendment Act 2005 has sharpened the focus on regional councils' strategic land use planning function. The Act introduced as a new regional council function "the strategic integration of infrastructure with land use through objectives, policies and methods".
"Infrastructure" is defined to include electricity transmission. It is too early to say what effect this change may have on the management of the transmission network under the RMA but the amendment certainly provides a clearer mandate for regional councils to (for example) direct urban and rural development away from corridors used for electricity transmission.32
4.4 Related Issues: Property Rights
In general terms, transmission lines require two forms of approval:
- a land use right - authorisation under the RMA to undertake the activity of transmission and produce adverse effects on the environment; and
- a property right - authority to occupy land (including private land) and to have access to, and across land, for maintenance purposes etc. This is governed by the Electricity Act 1992.
4.4.1 Transpower's Approach to Securing Property Rights in Respect of New Lines
Where new lines33 are proposed, Transpower needs to secure a property interest in all those properties across which any new line would traverse. This is achieved by negotiating easement agreements with individual landowners with Transpower paying consideration for the rights it needs to acquire. Under the Public Works Act 1981, Transpower can, if necessary, seek the approval of the Minister of Lands to compulsorily acquire an interest in land.
Without an easement agreement, or some other form of secured ownership interest, a resource consent for a new line cannot be exercised since Transpower has no access to the proposed site of the project.
However, for reasons set out later, securing a property right involves more than gaining a right to access. It also involves securing the rights to have lines and other assets protected from activities that might adversely affect them.
The RMA is an environmental management statute. By and large, it does not deal with matters relating to access to private land. As noted above, that is a matter for private negotiation, or in the case of public works, compulsory acquisition (if necessary) under the Public Works Act 1981.
As a network utility operator, Transpower can apply to the Minister of Lands under section 186 of the RMA to have land compulsory acquired under the Public Works Act if negotiations with landowners are unsuccessful. Similarly, if Transpower has not acquired an interest in land that it designates under the RMA, the owner of that land may apply to the Environment Court (section 185) for an order obliging Transpower to acquire an interest in the land under the Public Works Act. In the latter case, the designation process can trigger procedures by which Transpower is obliged to acquire an ownership interest, and hence land access.
The link between designation and acquisition exists to protect landowners whose land may be incapable of reasonable use, suffer a decline in value, or be unsaleable, following the inclusion of a designation in a district plan.
4.4.2 Property Rights Associated with the Pre-1988 Transmission Network
Although Transpower plans to enter into easement agreements with landowners affected by any new lines, it has few easement agreements with landowners affected by pre-1988 lines.
The way in which access for transmission was secured to private property in the past (pre-1988) was unsatisfactory by today's standards. The processes employed under the Public Works Act were inconsistent and informal. As a result, there are often no clear or detailed records relating to the installation of lines which set out the respective rights (and obligations) of the parties. Many landowners argued, and continue to argue, that they did not (and do not) receive adequate compensation for these lines.
Recognising the inadequacy of the processes, the government considered the issue in detail in 1992. This resulted in the Electricity Act 1992. In passing that Act, Parliament formalised the process Transpower must use to secure access to private property.34 In addition to acknowledging the need to put the future property/access process onto a better footing, Parliament also recognised that the status and rights of many existing lines was unclear. Accordingly, it determined that the situation should be regularised and so deemed all pre-1988 lines to be lawfully installed. It also determined that the line owners should continue to have rights of access to existing works for maintenance.35 Parliament's consideration of this issue in 2001 further clarified these rights.36
As a result of these decisions, Transpower's pre-1988 lines (the majority of its lines) continue to lawfully occupy private land by virtue of section 22 of the Electricity Act 1992 that provides for existing works to continue to be fixed or installed until the owner decides otherwise. Section 23 of the same Act provides Transpower with the power to gain access to lines for the purpose of inspecting, maintaining, or operating them
Maintenance is defined to include, "any replacement or upgrade of existing works as long as the land will not be injuriously affected as a result of the replacements or upgrade". That means that if any replacement or upgrade of an existing line "injuriously affects" the land (i.e. there is an adverse effect on the value of land), then the work is defined as a new line and an easement is required.
In this way the Electricity Act not only legitimises occupation of private land, it also provides land use authorisation and control, by establishing a form of existing use right. Transpower's use of lines must comply with the existing use provisions of both the RMA and the Electricity Act. If its proposed work cannot comply with the existing use rights of the RMA, then it must secure a resource consent (or designation). If it is not consistent with the existing use right of the Electricity Act, it must secure an easement with the affected property owner.37
4.5 Transmission and the Electricity Act 1992
4.5.1 Role of the Electricity Commission
In addition to clarifying the status of transmission lines established pre-1988, the Electricity Act establishes the Electricity Commission.38
One of the Electricity Commission's key responsibilities is to decide whether or not to approve transmission investments proposed by Transpower. Approval enables Transpower to recover the costs of those investments from its customers. The details of its transmission role are in part F of the Electricity Governance Rules 2003 made under the Electricity Act. The Electricity Commission is also guided in its role by the Government Policy Statement on Electricity Governance (October 2004).
The Electricity Commission must publish, at least every two years, a Statement of Opportunities (SOO). The SOO sets out a range of possible future electricity generation and demand scenarios. It also presents an analysis by the Commission of the ability of the transmission grid to meet specified grid reliability standards under each of those scenarios.
The SOO enables interested parties to identify opportunities for investment in transmission and transmission alternatives, such as generation, demand-side management, and energy efficiency.
Transpower periodically prepares a grid upgrade plan containing specific transmission investment proposals. Transpower proposes investments which enable the grid reliability standards to be maintained, or which are justified on an economic basis.
The transmission investment proposals must be assessed against a grid investment test which was developed by the Electricity Commission in consultation with electricity industry participants. The grid investment test (GIT) provides a method for evaluating proposed transmission investments against alternative projects on a net market benefits basis. The evaluation must be applied using each of the possible future electricity generation and demand scenarios in the SOO.
If the Electricity Commission is satisfied that the transmission investments proposed in Transpower's grid upgrade plan meet the requirements of the Electricity Commission's GIT, the Electricity Commission may approve the investment. This enables Transpower to recover the costs of the approved investment from its transmission customers.
The GIT does not weigh all environmental considerations but it does allow consideration of the costs of complying with the RMA. Some land owners and local authorities consider that the GIT should be broadened to ensure that environmental and "community" concerns are more fully factored into the decision on whether and how Transpower should invest in grid upgrades.
4.5.2 Other Relevant Electricity Act Matters
Various other instruments provided for under the Electricity Act address particular risks to the transmission network.39 These include the following.
Specification of Electrical Safe Distances
The New Zealand Electrical Code of Practice for Electrical Safe Distances 2001 (NZECP 34) is an instrument prepared under Part IV of the Electricity Act 1992. Compliance with such instruments is mandatory.
NZECP 34 sets out minimum safe electrical distance requirements for overhead line installations and other works associated with the supply of electricity from generators to end users (i.e. NZECP applies to both transmission and distribution).
NZECP 34 sets out minimum requirements in respect of:
- excavations or construction near overhead electric line supports;
- limits for construction near conductors;
- limits for the installation of conductors near existing buildings and similar structures;
- the separation and height of conductors near existing buildings and similar structures;
- the separation of overhead telecommunications lines and conductors;
- overhead electric line access, supports and stays;
- limits on material deposited or placed under or near an overhead electric line;
- operation of mobile plants near conductors;
- safe distances for the design of substations, switchyards and switchboards;
- minimum distances for persons to exposed live parts; and
- inspection and records.
Therefore, NZECP 34 controls both:
- the design and installation of conductors and associated devices and facilities; and
- land use (in the sense that specifying minimum safe distances means that certain land uses will be controlled).
It does so for the purpose of managing risk of electrical hazard, in particular, the risk of:
- inadvertent contact between conductors and people or other objects; or
- high voltage power "jumping" across a gap from a conductor to another object.
NZECP 34 has a key role in ensuring the safety and reliability of the transmission network. However, Transpower reports that there are problems with both compliance and enforcement of NZECP 34.40
Hazards from Trees
The Electricity (Hazards from Trees) Regulations 2003 (the "Trees Regulations") are designed to manage the risk posed by trees encroaching too close to electrical conductors. The regulations also set rules about who has responsibility for cutting trees that encroach on electrical conductors, and assign liability if those rules are breached and provide for a system of resolving disputes.
In essence, the Trees Regulations set "growth limit zones" and "notice zones" and establishes a system whereby line owners can serve on the tree owner a "hazard warning notice" if a tree encroaches into a notice zone, or a "cut or trim notice" if a tree encroaches into a growth limit zone. Tree owners served with such notices have responsibilities to cut or trim a trees to ensure that there is no encroachment on the growth limit zones.
These zones vary in width depending on the voltage of the conductor and the span between support structures. The Trees Regulations do not directly limit where trees may be planted but they do affect some land uses (e.g. forestry) within defined corridors.
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