11. ECNZ as a Residual Entity
Following the split, a number of assets, liabilities and functions will be retained in ECNZ as a residual entity, including:
- ECNZ's existing debt and the matching loans to the new SOEs;
- ECNZ's existing hedges and the offsetting contract with the new SOEs;
- management of certain existing litigation;
- records management;
- functions under the Agreements for Sale and Purchase; and
- administrative matters.
ECNZ will remain an SOE but an Order in Council will be made under the Electricity Industry Reform Act 1998 to remove the requirement for ECNZ to operate as a successful business. Once this has occurred, the objective of the residual company should be to dispose of its assets and satisfy its liabilities as quickly as possible.
The Residual ECNZ Business Plan recommends that, following settlement, the name of the company is changed to reflect its new status. The Business Plan sets out the workstreams and issues which will remain with the residual company and identifies how these issues should be dealt with. The Business Plan recommends a commitment to outsourcing as part of the drive towards the eventual wind-up of the company. It also sets out expected resources required for each of the areas retained.
ERTU considers that the Residual ECNZ Business Plan is a critical document in the achievability of the split, and that the residual ECNZ needs to be appropriately resourced to ensure the objectives of winding up ECNZ quickly and efficiently will be realised.
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