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• Appendix 2

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• Electricity Transmission

1. Nature of the Problem

At its most fundamental, the issue is straightforward. Activities that take place under, or in close proximity to, transmission lines can pose various risks to the on-going operation of the transmission network. In simple terms those potential risks are as follows.

• Risk to structural integrity
  This may be caused by the physical undermining of poles, pylons and underground cables by, for example, excavation of earth; scouring through the diversion of water; or by fire.
• Risk of restricted access to lines and support structures
  This may be caused by building and land development that creates physical barriers to vehicles and equipment making maintenance and repair difficult or impossible.
• Risk of disruption to transmission
  This may be caused by faults and outages associated with:
  • Physical contact or proximity between conductors (lines) - including underground cables - and other objects (e.g. buildings, trees, mobile irrigation systems, excavation equipment);
  • deposition of material (e.g. dust⁸⁰) on lines and support structures that may cause "flashovers";⁸¹ or
  • damage to underground cables, typically by excavating equipment.
• Risk of electrical hazard (and potential liability)
  The potential for electricity to arc (i.e. "jump") between conductors and other objects increases with proximity to conductors. Arcing poses a direct risk to life and property. A reduction in safety distances can be associated with a range of activities including:
  • deposit of material under (or flooding of land around) lines;
  • construction of buildings under lines;
  • other miscellaneous activities.⁸²
• Risks associated with reverse sensitivity
  "Reverse sensitivity"⁸³ occurs in situations where an established transmission line may be "sensitive" to a new activity locating near to it. This sensitivity occurs because the new activity may be exposed to adverse effects (and risks)⁸⁴ from the existing transmission line/substation and may therefore use legal and political mechanisms to exert pressure on Transpower to modify its operation.

2. Existing Mechanisms to Manage Risks

There are a number of ways in which one or more of the risks identified can be managed using existing mechanisms. These, and their limitations, are as follows.⁸⁵

2.1 Common Law Remedies

Transpower as owner of the transmission network can take legal action at common law against any person who causes damage to, or trespasses upon that network.

The difficulties with relying on common law remedies are as follows.

1. Such action is taken after the event. While Transpower might be awarded redress through the Courts a much more preferable outcome, for all, is for the offending incident to be avoided in the first place.
2. The threat of common law action tends not to provide sufficient deterrent partly because:
   • It can be difficult and expensive for Transpower to prove (and other parties to defend) the tests necessary at common law;
   • There is a lack of knowledge amongst those parties who undertake negligent or nuisance activities about what might be actionable under common law.
   • Common law does not spell out the bounds of acceptable effect.

For those, and other reasons, three specific mechanisms that formalise obligations and/or codify rights have been made available.⁸⁶ These three specific mechanisms are discussed below.

2.2 Easement Agreements between Transpower and Individual Property Owners

Under the Electricity Act 1992, Transpower must enter into an easement agreement to secure a property interest in private land over which its post 1988 lines (new and upgraded) pass. A draft model easement agreement has been jointly developed by Transpower and Federated Farmers. This includes restrictions on what the landowner may do within the easement corridor as part of the broader agreement. The restrictions include obligations within the defined easement corridor not to:

• alter or disturb the present grades and contours of the surface;
• erect any building;
• plant any vegetation;
• operate any equipment or vehicles (within a prescribed distance from a conductor);
• excavate or deposit material;
• impede access;
• cause flooding; or
• light any fires.

The principal deficiencies with this mechanism are that:

1. crucially, it is available only in respect of Transpower's post 1988 lines (new or upgraded) not the 12,000 km of lines that were constructed prior to 1988;
2. it can only control what the affected landowner can do. It cannot control the activities of third parties that might affect lines (on, for example, neighbouring properties or on road reserve etc); and
3. it is not capable of managing the reverse sensitivity risk⁸⁷ (partly because subdivision would be unaffected).

2.3 Electricity Act Mechanisms

The Electricity Act provides two existing mechanisms:

• NZECP 34: 2001 - The New Zealand Electrical Code of Practice for Electrical Safe Distances; and
• The Electricity (Hazards from Trees) Regulations 2003.

NZECP 34 sets out minimum safe 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:

1. excavations or construction near overhead electric line supports;
2. limits for construction near conductors;
3. limits for the installation of conductors near existing buildings and similar structures;
4. the separation and height of conductors near existing buildings and similar structures;
5. the separation of overhead telecommunications lines and conductors;
6. design and installation of supports and stays (so as not to obstruct access) and; access to overhead electric lines (to ensure lines are not accessible to the public)
7. limits on material deposited or placed under or near an overhead electric line;
8. operation of mobile plant near conductors;
9. safe distances for the design of substations, switchyards and switchboards;
10. minimum distances for persons working near exposed live parts; and
11. inspection and records.

There are two chief problems with NZECP 34.

• First, the means for achieving compliance are poor. The Ministry of Economic Development (MED) is the administering department, but is not well placed to effectively enforce compliance. The primary means of determining whether a new structure or significant excavation is proposed is through building and/or resource consent application processes. There is no opportunity for MED (or Transpower) to be involved in building permit processes and involvement of MED (or Transpower) in RMA processes is at the discretion of the local authority.
  Transpower is in a position as part of line management to identify non-compliance with the standard. Transpower research indicates that there may be as many as 5000 existing instances of non compliance. The difficulty is that this is post transgression monitoring. By the time a breach of the code is detectable, the infringing activity is in place and cost of mitigating the associated risk is usually very high. In other words, there is no link between responsibility for enforcing NZECP 34 and effective means of controlling development (a local authority responsibility).
• Second, NZECP 34 focuses solely on electrical hazard not on the full range of risks identified above. Although there may be incidental benefits from enforcement of NZECP 34 (in terms of, for example, maintained access) the code is not designed to achieve those broader objectives.

The Trees Regulations set out rules establishing responsibility for cutting trees that encroach too close to electrical conductors. While there is no particular problem with the trees regulations they only manage one specific risk.

2.4 Restrictions Included in District and Regional Plans Prepared under the Resource Management Act

Under the RMA local authorities must prepare district plans and may prepare regional plans. District plans control the actual or potential effects (on the environment) of the use of land. Given that transmission lines are part of the environment, district plans could be used to control activities that affect them. Under the RMA, no person may discharge contaminants to air, land or water; or dam or divert water unless permitted by resource consent or a regional plan. With the exception of regional coastal plans, regional plans are not mandatory but where they are prepared they may also control (or enable) activities that have actual or potential adverse effects on the transmission line.

In addition, unless plans explicitly limit discretion, when making decisions on any resource consent, local authorities can take into account adverse effects on any part of the environment (including transmission lines).

At present the RMA is not being used as perhaps it could be to control matters affecting transmission lines:

• with some exceptions, local authorities have elected not to impose controls designed specifically to protect transmission lines from the sorts of risks identified;
• the above problem is compounded by the fact that most lines are not officially designated in plans and therefore are not shown on district planning maps. This means that even when resource consents are required (for reasons other than their effects on transmission) those preparing and assessing resource consent applications may not be aware of the lines and may not, therefore, take account of actual or potential risks; and
• the Act provides for existing use rights, being rights to continue a lawfully established activity after a plan comes into effect that does not provide for that activity (provided the effects stay the same or similar in character, scale and intensity). This means that despite a plan rule to the contrary, activities that adversely affect a transmission line may continue if they were lawfully established.⁸⁸

Transpower has been successful in having a "20 metre rule" inserted in most district plans. This ensures that transmission issues are assessed in subdivision applications. This may limit the extent of future building problems but does not address the possibility for development on existing lots.

A summary of the existing mechanisms and their limitation is set out in Table 1.

3. Options to Achieve Better Management of Risks

There are two main options to better address the risks identified in section 2 above. These are:

• improving enforcement of NZECP 34; or
• requiring, through a national policy statement and/or a national environmental standard, that local authorities adopt policies and methods and determine resource consent application in ways that protect the transmission network from the risks identified.

3.1 Evaluation of Options

Option 1: Better Enforcement of NZECP 34

Better enforcement of NZECP 34 could be achieved in various ways. One option might be to amend the Electricity Act to seek to enhance enforcement powers. However this would not address the fundamental need for NZECP 34 enforcement to operate in a preventative rather than post transgression manner if it is to be effective and costs are to be minimised. That could best be achieved by linking enforcement to the building consent process. Such an approach would involve a change to the Building Act not the Electricity Act.⁸⁹

If responsibility for enforcement was transferred to local authorities there would be clear benefits simply because local authorities are better placed to be able to advise people of actions that would contravene NZECP 34. Local authorities' existing regulatory responsibilities (particularly under the Building Act) provide the basis upon which local authorities can assess compliance before there is a breech.

This could be achieved by linking NZECP to the Building Act so that a local authority could not issue permits for works that breached NZECP 34.⁹⁰

A secondary benefit is that such an approach would not upset the established level of regulatory control.

The main difficulties with that option are that:

• local authorities may not have capacity (in terms of skills and expertise) to assess the risk of electrical hazard. (This may not be critical if there was no assessment of hazard required - only assessment against NZECP 34 minimum standards);
• linking NZECP 34 enforcement to the Building Act would not, by itself, be sufficient since not all the activities controlled by NZECP 34 are controlled under the Building Act. The deposit or excavation of material, for example, is controlled under the RMA. Therefore, there would also need to be link with the granting of resource consents (and permitting activities in plans) under the RMA;
• furthermore, there are some activities controlled by the NZECP 34 that are not related to the enforcement of any local authority function. An example is the minimum safes distances for persons working near exposed live parts, or the operation of mobile plant (electrical equipment) near lines. Those issues are more closely related to OSH functions of the Department of Labour. In other words some aspects of NZECP 34 do not sit well with local authorities and responsibility for compliance would therefore need to be split not only between different parts of a local authority but also between local authorities and central government agencies. That may make for a difficult and complex enforcement regime;
• even if the above problems can be overcome (or prove not to be significant), the focus on electrical hazard would remain and the wider risks would not be addressed. Included in the risks that would remain unmanaged would be:
  • structural integrity (from, for example, diversion of water or fire)
  • restricted access (from buildings that comply with safety distances but inhibit vehicular access to a site);
  • disruption to transmission (from, for example, discharge of dust or other contaminant);
  • reverse sensitivity (from the establishment of new uses in close proximity to existing effects such as noise).
• the function would come at some cost for local authorities and for building consent applicants. Building applications would need to include information on the exact position of overhead lines (that might require specific engineering advice). Local authorities would need to carry out some level of additional assessment (to verify electrical engineer reports and determine whether the line owner has given its consent). The cost on local authorities could, presumably, be passed on to applicants. However, there would be some costs associated with, for example, training staff and producing information/advice to potential applicants, which could not be passed on.

Option 2: Use of RMA Mechanisms

The use of an NPS and/or NES to encourage and/or require local authorities to more effectively manage effects on the transmission network could also be achieved in various ways using different policy formulae and different combinations of polices and standards. However, whatever policies were developed the end result would be that the RMA, rather than NZECP 34 would become the principal means of managing the risks to the transmission network.

The benefits of relying more on the RMA are:

• it would allow a range of risks (broader than electrical hazard) to be managed -consistent with the purpose of the Act. This would include issues relating to some risks to structural integrity, access, disruption to transmission and reverse sensitivity;
• it would provide a tool in subdivision control that allows potential risks to be avoided (and expectations managed) at an early stage in the development process; and
• it provides access to the existing enforcement and dispute resolution mechanisms of the RMA. This includes the ability for any person (including Transpower) to take an enforcement action and for disputes about what is a necessary and reasonable level of control to be resolved by the Environment Court.

The disadvantages of using the RMA include some of the matters identified in relation to option 1. These include:

• The approach does not remove the need for easement agreements to be negotiated in respect of land affected by post 1988 lines. Nor does it remove the need for NZECP34 to remain (since, as noted above, NZECP 34 addresses matters that are broader than those that may be controlled under the RMA). Therefore, duplication and complexity will not be removed and potential for inconsistency between these mechanisms may be increased.
• There is likely to be some further cost for local authorities as they would need to address an issue most have previously left to one side.
• Existing activities that pose risk could continue to operate under the RMA's existing use rights provisions (although they would remain subject to NZECP 34).

Depending on whether an NPS and/or NES was used (and on the specific design of the policies and/or standards) there could be further disadvantages. These could, potentially, include:

• added cost for landowners who could face restrictions more onerous than those currently set out in NZECP 34 or anticipated by the (draft) model easement agreement;
• added cost for local authorities which would need to amend their district and regional plans to give effect to an NPS (but not to an NES); and
• matters that where agreed outside of the public process would be subject to public debate which could lead to greater levels of litigation about appropriate levels of control.

The application of the three options to the issues identified in Section 2 of this report, are summarised in Table 2.

4. Evaluation

Passing responsibility for enforcement of the relevant parts of NZECP 34 to local authorities has some attraction. Although difficult, it would be possible to ensure that permits under the Building Act and consents under the RMA were not issued in breach of NZECP 34. However, the limited focus of NZECP 34 would mean that some risks remain unmanaged (including, for example, risks associated with access restrictions, flashovers, actions of third parties, and reverse sensitivity) . It would therefore offer only a partial solution.

If NZECP 34 was to be the primary mechanism to address risks, its scope would have to be broadened or a companion code developed to address the broader range of risks. That is, however, unlikely to be viable since the risks that it would need to address require an element of case-by-case assessment and discretion. It seems unlikely that solutions could be specified in a code for the full range of risks in the way that NZECP 34 currently deals with electrical hazard.

Although the RMA does have the disadvantages indicated in Table 1, most of those can be managed by careful policy and/or standard design.

In particular, the use of an NES:

• could be based on the existing controls of NZECP 34 and hence remove potential for confusion; and
• would remove the need to amend plans and undertake expensive plan change processes.

In addition, significant benefits could be derived from an NPS (complementing an NES) that encouraged local government to address the broader range of issues. If management of those risks was associated with resource consent processes that would be required even in the absence of an NPS, there would be no significant additional transaction cost.

The one disadvantage of that approach is that it would make much building activity subject to RMA control when the sole issue is electrical hazard. One way around that would be to ensure that those parts of NZECP 34 that are best enforced through the building permit process are enforced through that process (by local authorities). RMA instruments could be limited to controlling only those matters that cannot be controlled by linking NZECP 34 to the issuing of permits under the Building Act.

5. Summary

The problem to be addressed is the potential for activities under and adjacent to lines to pose a risk to the efficient operation of the transmission network. The existing NZECP is one of the principal existing means to manage these risks. However, it is deficient because it does not address all the risks and enforcement is post transgression (only occurs after a breech has occurred).

This deficiency could be rectified by either improving the enforcement regime for NZECP 34 or by ensuring that the RMA plays a greater role. On balance, a combination of these mechanisms seems likely to be most effective.

Such a combined approach would involve the following.

1. Local authorities would enforce NZECP 34 though the Building Act insofar as that is appropriate given the scheme of the Building Act.
2. Those aspects of NZECP 34 that cannot be enforced via the Building Act that relate to natural or physical resource use (such as excavation and deposition) would be controlled under the RMA.
3. Those aspects of NZECP 34 that are not within the scope of the Building Act or the RMA would continue to be enforced by the Ministry of Economic Development.
4. Where buildings could give rise to risks that were broader than electrical hazard, they could also be controlled under the RMA (such as buildings limiting access).
5. Where resource use (other than building construction) presents risks to the transmission network (other than the risk of electrical hazard) that use would be managed under the RMA.
6. To ensure that matters 2-5 above are implemented effectively an NES and NPS could be developed (subject to detailed policy design).
7. Easement agreements for post 1988 lines would continue to be required. These would be negotiated on terms acceptable to landowners and Transpower and may reflect whatever restrictions flow from the regime outlined above.