Summary of Legislation
[ Last Updated 21 November 2005 ]
The proposals contained in the Power Package require new legislation and changes to existing legislation. A Bill will be introduced before the end of the year.
This paper summarises the legislation resulting from the Power Package. For further information on the background to these changes, please refer to the accompanying documents, Power to the Consumer and Power to the Environment. A summary of all the elements of the Package is provided in Summary of Government Decisions.
New Legislation
New provisions will provide the Government with the power, if required, to:
- establish the Electricity Governance Board, including requiring the Board to establish rules consistent with the Guiding Principles in the Government Policy Statement (if this power is used, the Government will also have power to direct the Board);
- provide for reporting and monitoring on the Board's performance, including reports to Parliament by the Parliamentary Commissioner for the Environment and the Controller and Auditor-General;
- establish a consumer complaints resolution (ombudsman-type) system;
- require market participants to release information on spill from hydro dams and on aggregate future electricity prices;
- empower the Commerce Commission to determine transmission pricing methodologies;
- establish rules for connecting distributed generation to distribution lines;
- limit fixed charges in the bills of domestic consumers; and
- require retailers to offer pre-payment meters at reasonable prices.
The Government will only use these powers if it is not satisfied that sufficient progress is being made by the industry.
Note: The Commerce (Controlled Goods or Services) Amendment Bill 1999 was introduced by the previous Government and remains on the Order Paper. This Bill will not proceed as it is not sufficiently comprehensive to cover the range of legislative changes required by the Government.
Amendments to the Consumer Guarantees Act 1993
An amendment to the Consumer Guarantees Act will be made to define goods and services to include electricity, line services and similar network utilities.
Amendments to the Commerce Act 1986
Amendments will be made to the Commerce Act 1986 to:
- enable the Commerce Commission to put Transpower and individual distribution companies under price control if they breach thresholds or criteria determined by the Commission;
- require the Commerce Commission to undertake a re-calibration of asset values for electricity lines and determine its preferred asset valuation methodology;
- require the Commission to review companies under price control before the end of five years, to determine whether price control should be re-imposed;
- enable the Commission to use modern price control techniques such as CPI-X;
- restrict rights of appeal against Commission determinations to points of law; and
- allow for an industry levy to recover the cost of Commerce Commission work on electricity lines regulation.
Amendments to the Electricity Act 1992
Amendments will be made to the Electricity Act 1992 to:
- transfer responsibility for information disclosure on electricity transmission and distribution to the Commerce Commission;
- ensure that the Act contains provisions appropriate for information disclosure in the new regulatory environment;
- clarify the lawfully fixed status of "existing works";
- introduce a definition of maintenance of "existing works" modelled on the Resource Management Act definition;
- clarify the point of supply by reference to the property boundary or a contractually-agreed electrical interconnection point;
- extend the expiry date in section 170A, which provides powers to regulate customer switching arrangements, from 31 March 2001 to 31 March 2006; and
- set out arrangements for monitoring and reporting on whether and to what extent the outcomes the Government sets for the electricity sector are being met effectively over time.
Amendments to the Electricity Industry Reform Act 1998
Amendments will be made to the Electricity Industry Reform Act 1998 to:
- allow electricity trusts to establish "mirror" trusts at any time and without restriction on expansion into electricity supply;
- allow line companies to own distributed generation up to 2 per cent of the network's maximum demand or 5MW, whichever is greater;
- allow lines companies to own distributed generation with no quantified restrictions, provided that the source of such generation is a new renewable energy resource and that the generation activity is carried out in a separate company subject to the arms length rules set out in Schedule 1 of the Act; and
- require line companies to publicise their intention to construct distributed generation 30 days prior to entering binding contracts.
Amendments to the Energy Companies Act 1992
Amendments will be made to the Energy Companies Act 1992 to:
- require electricity distribution and retail/generation trusts and trust-like entities to produce annual financial statements which are to be publicly available and audited by the Audit Office;
- require electricity distribution and retail/generation trusts and trust-like entities to develop a Code of Practice to give beneficiaries access to information and meetings, together with review procedures and backstop procedures for Government involvement if progress in developing a Code is not satisfactory.
Amendments to the Electricity (Information Disclosure) Regulations
The Electricity (Information Disclosure) Regulations will be amended to require the asset management plans published by lines companies to include proposals for construction of distributed generation under consideration by the company.
Back to Top