Electricity and Gas Industries Bill Government Bill Commentary As reported from the Commerce Committee Recommendation The Commerce Committee has examined the Electricity and Gas Industries Bill and recommends by majority that it be passed with the amendments shown. Introduction This bill puts in place a clear framework for both the electricity and gas sectors with the objective of ensuring the achievement of the Government's energy policy goals. The bill reflects the establishment of an Electricity Commission and updates terms in the present Electricity Act 1992 to take account of this. It provides for the Electricity Commission to endeavour to ensure that New Zealand's electricity supply is secure, with adequate reserve energy for dry years. With respect to the gas sector, the bill provides for the establishment of an approved industry body to co-regulate the gas industry while retaining backstop powers to establish an Energy Commission if the industry body is not successful. Background information on the rationale and need for the bill is contained in the explanatory note of the bill as introduced to the House (86---1). Part 1---Amendments to Electricity Act 1992 Addition of a principal purpose The Government members recommend that clause 4 be amended to include a new principal purpose: ``to provide benefits for consumers'' in order to make this purpose more explicit in the legislation. Low fixed charge tariff for residential customers The Government members recommend that new clause 7A be inserted. This will amend the low fixed charge tariff provisions to allow regulations to prohibit trusts from having differential rebates based on whether or not a consumer is on a low-fixed charge tariff option. The ``toolbox'' The ``toolbox'' refers to the range of powers given to the Electricity Commission under clauses 8 and 9 of the bill. of powers given to the Electricity Commission The Government members recommend the inclusion of a new section in clause 9 (Section 172F(1)) to ensure that the exercise of any powers, given to the Electricity Commission under clauses 8 and 9 of the bill, are used as a last resort following a full and proper evaluation of the options and consideration of the costs and benefits. Many submitters objected to the range and breadth of the powers because of the possible dampening effect on private investment and increased risk protection needed to guard against regulatory appropriation. The Government members consider that owing to the complexity of the electricity sector and the lessons learnt from past electricity supply crises, such a range of powers is necessary (as a last resort) to deal with all contingencies. Review process on decisions made in urgency The Government members recommend that clause 9 (section 172E(3)) be amended to include a new step that allows the Electricity Commission to recommend whether the proposed regulations should be revoked, replaced or amended. Some of us felt that the six months set out to complete the review of decisions made in urgency is too long and should be reduced to three months. This would bring it in line with the time requirements set out in clause 18 (sections 172ZL and 172ZM) in regard to reporting periods. The Government members believe that where external consultation is required, as in clause 9 (section 172E(2)(b)), six months is needed to adequately complete such consultation. Complaints resolution system - specified appeal rights The committee unanimously recommends an amendment to clause 9 (27). This is in response to submitters' concerns that the appeal rights be specified in clause 9 (27) and should reflect what is currently available through the Electricity Complaints Commissioner scheme. Transmission agreements The committee unanimously recommends the insertion of new clause 10A (section 172KA) giving the Electricity Commission the power to oblige Transpower and industry participants to enter into transmission agreements for connection to, use of, and investment in, the national grid. This will enable the Electricity Commission to make a binding decision in the event that those parties seeking a negotiated transmission agreement with Transpower are unable to agree. Inclusion of Regulations in Primary Legislation The Government members recommend that a number of regulations in the Electricity Governance Regulations 2003 (SR 2003/374) be included in clause 10A, following advice received from the Regulations Review Committee that these regulations are more appropriate to primary legislation than to delegated legislation. The regulations to be included are: o regulation 6 (section 172KF), regarding the restrictions on remedies industry participants may take in respect of breaches of the electricity governance regulations or rules This regulation has been amended to provide more explicit restrictions on remedies with regard to service providers. o regulation 79 (section 172KB), regarding industry participant cooperation with investigations carried out for the purpose of monitoring or enforcing electricity governance regulations or rules o regulation 80 (section 172KC), regarding the protection of privileges pertaining to the provision of incriminating evidence o regulation 81 (section 172KD), regarding limits on investigation powers o regulation 107 (section 172KE), regarding actions that the Rulings Panel may make after consideration of any matter under the electricity governance regulations o regulations 184-193 (section 172KG-KP) regarding appeals. Amendment to the principal objective of the Electricity Commission The Government members recommend clause 12 be amended so that the principal objectives include promotion and facilitation of the efficient use of electricity. The principal objectives in relation to electricity are: o to ensure that electricity is produced and delivered to all classes of consumers in an efficient, fair, reliable, and environmentally sustainable manner o to promote and facilitate the efficient use of electricity. Removal of the Minister's power to direct the Electricity Commission The committee unanimously recommends that new clause 15A be inserted. This clause repeals sections 172ZA and 172ZB of the Electricity Act 1992, thus removing the Minister's power to direct the Electricity Commission. This is in response to submitters' concerns that the Minister's powers to direct the Electricity Commission are too wide. However, the Government members recommend amendments to clause 18 which retains the Minister's powers to set objectives and outcomes that the Government wants the Electricity Commission to give effect to. Amendment to the Electricity Commission's function relating to electricity efficiency The Government members recommend that clause 13 be amended to give the Electricity Commission the explicit ability to provide financial incentives for investment in electricity efficiency by homeowners and businesses. This will allow more effective promotion of energy efficiency. Levy consultation The committee unanimously recommends that new clause 16A be inserted to require the Electricity Commission to consult with those industry participants who pay the levy on its proposed budgets. The Commission must report to the Minister on the outcome of that consultation. This recommendation has resulted from many submitters expressing concern regarding the possible escalation in the cost of regulation and a lack of consultation in setting the levy, which makes it more akin to a tax. Part 2---Amendments to Electricity Industry Reform Act 1998 Vertical reintegration of distribution with generation and retail The Government members recommend that clause 22(a) be amended so that the limit on lines companies generating capacity is increased from the greater of 25 MW and 10 percent, to the greater of 50 MW and 20 percent of the maximum demand of the lines owned or operated by the person. Electricity lines companies have asked that the Government repeal the provisions in the Electricity Industry Reform Act 1998 that restrict the ability of lines companies to invest in generation and retail. While the lines companies make some valid points, risks still exist. Instead of repealing the provisions outright, the Government members support, over time, further progressive easing on the limits of how much lines companies can generate and retail. Transpower's ability to contract with an electricity supply business The Government members recommend that clause 24 be amended so that Transpower may contract with an electricity supply business for that electricity supply business to generate power for the purpose of deferring the need for investment. In essence, it may be more cost effective to generate closer to the demand than to up-grade the transmission lines. Part 3---Amendments to Commerce Act 1986 Regulatory jurisdiction over lines businesses The committee unanimously recommends that clause 31 be amended to allow the transfer of responsibility for the targeted control regime in relation to Transpower from the Commerce Commission to the Electricity Commission as soon as it is found to be efficient to do so. This would remove the proposed 31 December 2005 limitation. This is due to the extent of the Electricity Commission's involvement in key decisions affecting Transpower's expenditures. In recognition of submitters' concerns, we recommend that the ability to transfer regulatory jurisdiction for all other large electricity lines businesses be deferred until 31 March 2009, the date to which the current thresholds apply. Many submitters felt that regulatory jurisdiction should remain with the Commerce Commission, or, that the transfer date be further deferred to maintain continuity and the integrity of the price control and other assessment processes already initiated by the Commerce Commission. Part 4A---Governance of Gas Industry Governance of the gas industry The Government members recommend the adoption of a co-regulatory model for the governance of the gas industry. This model allows for the establishment of an industry body in preference to an Energy Commission. The Energy Commission remains as a backstop regulator under the co-regulatory approach. This has involved inserting a large number of new clauses in part 4 of the bill. The co-regulatory approach was proposed by the Gas Industry Steering Group, Chairman---Rt Hon James Bolger. Deputy Chair---Phil James (NGC). Gas Producers---David Salisbury (OMV), Richard Tweedie (Todd), Victor Ojeda (Shell). Gas Transporters---Phil James (NGC), Steve Boulton (PowerCo), Mark Franklin (Vector). Gas Retailers---Steve Barrett (Contact), Murray Jackson (Genesis), Trevor Goodwin (Wanganui Gas). Residential Consumers---David Russell (Consumers Institute). Business Consumers---Peter Whitehouse (Business NZ). Industrial Consumers---Russell Longuet (Carter Holt Harvey). Secretariat---Brian Roche, Richard Clarke QC. made up of representatives from the upstream and downstream gas industry and gas consumers. The co-regulatory model has been designed by the Minister of Energy in conjunction with the Gas Industry Steering Group and has been carefully considered by the committee. The co-regulation model has been developed as a result of a consensus view in the gas sector that: o the gas industry could not achieve voluntary self-governance o the proposed regulatory model in the bill was heavily influenced by electricity industry concerns and might impose rules that may be inappropriate for the gas industry o co-regulation would share responsibility between Government and industry o co-regulation would ensure that the incentives of the industry are aligned as far as possible with the outcomes sought by the Government. Overview of the co-regulatory model An industry body, if approved by Order in Council, will co-regulate the gas industry. The Minister of Energy will recommend that an industry body be approved for this purpose if satisfied that it: o is broadly inclusive of the industry o has a governing body with a majority of independent members including an independent Chair o is capable of delivering outcomes that meet the Government's objectives for the gas industry. The industry body will have authority to recommend regulations and rules to the Minister in the areas of wholesale, processing, transmission, and distribution. The Minister can only accept or reject recommendations and cannot make his/her own recommendations in the above areas. In respect of establishing a consumer complaints scheme, customer-switching protocols, and developing model consumer contracts, the Minister must allow the industry body a reasonable opportunity to make recommendations. However the Minister will be able to use his/her powers to recommend regulations without a recommendation from the industry body in those areas. The Minister can recommend regulations or make rules in relation to prescribing terms and condition of access to the Maui pipeline and other retail/consumer issues in the bill without requiring a recommendation from the industry body. To cover its costs, the industry body will be able to recommend a levy rate to be imposed by way of regulation on all industry participants. Regulations and rules will be made in the ordinary way. The industry body will also effectively be the regulator. It will be available to implement, monitor, investigate, and enforce the regulations and rules made in respect of wholesale, processing facilities, transmission, distribution and retail areas. The industry body will be required to account to the Minister by way of an annual industry body strategic plan, annual report, and an auditor's report (the latter two will be tabled in the House of Representatives). Backstop powers currently in the bill will remain so that an Energy Commission can be established if co-regulation is not successful. Merits of the co-regulatory model The Government members support the co-regulatory model, which has widespread support from the gas industry and consumer groups. Co-regulation has a number of advantages over the use of a central regulator including: o assessing the benefits and costs to the industry of regulations and rules as the industry body can profit from the knowledge, experience and commercial interests of industry participants o the establishment, operation and costs of the industry will be met directly by industry participants so governance structures are likely to be more efficient o the Minister retains the power to directly recommend regulations or make rules for retail/consumer outcomes o the industry has strong incentives to demonstrate leadership and cohesiveness to ensure the success of the co-regulatory model. Accountability arrangements for the industry body have been designed to ensure there is sufficient degree of certainty that the expectations of the Government will be met in a timely manner. Furthermore the Government will impose timelines by when the industry body should comment on recommendations it thinks important. The co-regulatory model has statutory backing and therefore differs from the electricity self-governance model, which was based on voluntary contracting. Minority views New Zealand National The National Party opposes this bill. National agrees with the overwhelming view of submitters who express concern that the Electricity Commission's design creates an institution with advisory, operational, and regulatory roles which place it at risk of serious performance failure and judicial review. The National Party is very concerned that the Electricity Commission will fail to achieve the independence it requires to be an effective and credible regulator, whilst the Commission is both subject to government policy and Ministerial direction. Given the structure of the Commission and the role of the Government in setting the policy which the Commission must follow, National believes it is inappropriate for the Electricity Commission to be able to have an industry-wide levy to cover the costs. Changes in the bill during the Select Committee stage do not go far enough, and National does not support the ability for the Commission to set the levy. National supports the total removal of any limits on lines companies entering into generation, subject to the continued oversight of the Commerce Commission to ensure no cross-subsidisation between lines and generation activity; and to ensure equitable access to lines by competing generators. The proposals in the legislation covering the gas sector are of serious concern to the National Party. National totally opposes clauses in the bill which will allow the Government to direct the usage of infrastructure. New Zealand First New Zealand First is of the view that of recent years there has been far too many adjustments to the structure of the electricity industry. Some changes were major, some less so but all have been undertaken on the pretext that the industry would become more efficient, more effective, have a continuing increase of capacity and prices to the consumer would be competitive, reasonable and fair. Little or no thought was given to compel industry players to co-operate fully in difficult times in the interests of the common good. The majority of the New Zealand public does not accept for one moment those aims have been achieved and New Zealand business has also significant concerns. Further, this bill has largely come about because of the failure to achieve the desired outcomes, which is in itself an admission of failure. New Zealand First believes there are three principal aims this Electricity and Gas Industries legislation should strive for. They are: o to guarantee security of supply o to obtain fair and reasonable prices o to encourage investment into the industry to ensure ever increasing capacity. With the establishment of the Electricity Commission and the operating tools this bill gives it, New Zealand First is of the view that security of supply concerns will be largely addressed. However, we also note that the workload the Electricity Commission will have to face is likely to be very significant. For this reason, New Zealand First believe the Commerce Commission should retain its responsibilities overseeing lines companies and, initially at least, take responsibility for regulating and monitoring the gas industry. In terms of obtaining fair and reasonable prices, New Zealand First doubts that this bill will have the desired effect, notwithstanding that the purpose clause has been amended, at New Zealand First's request, to stipulate this as an aim. Our third aim to encourage more investment could well be achieved by allowing lines companies to generate electricity and possibly become retailers. There is merit in allowing these entities to invest in generation in this country as against investing overseas - or here in an unrelated industry. However, to what degree? Rather than operating in a `knee jerk' fashion, as some advocate, and simply open the door fully for this to occur, or partially to an arbitrary level, New Zealand First is of the view that a formal review should be undertaken specifically to address this issue. Such a review could perhaps assist in identifying the best option available to address the Transpower problems, and specify the advantages/disadvantages of distributed generation. New Zealanders are sick of political games involving electricity. In straight talk, it is their view that electricity is not a luxury but an essential service which should be available at the `flick of a switch' and at reasonable price. New Zealand First has major concerns in regard to recent electricity legislation reforms. In 1998 radical reforms were undertaken but, to New Zealand First's dismay, not accompanied by sufficient regulation. The 2002 Act was similar - fell short by not recognising there was a need for compulsion for generators to co-operate for the social and economic good of the country at a time of `dry' lakes and relatively high electricity requirements. New Zealand First has concerns in regard to the disincentive, which exists for greater use of coal as a source of power. Gas, at reasonably low price at least, is running low whilst there is an abundance of coal. There is conflicting advice on whether electricity generated from coal is competitive or not. New Zealand First believes a review on investment in the industry could address the practicalities of using coal more extensively to fuel power stations. It should be noted that Australia is moving more into coal fuelled power stations. Further, there is much research being undertaken on a continuing basis in Australia in order to make coal a more environmentally friendly fuel. In summary, to achieve the specific aims identified by New Zealand First, it would be meritorious to put in place a formal review to address how, as a nation, we can best: o capitalise on all sources of electricity (hydro, gas, coal, wind, solar, etc.) o encourage continuing investment and thereby capacity o contain costs to a reasonable level. New Zealand First is of the opinion that this bill, with possibly a subsequent amendment, is the last chance of the market model retaining credibility. In short, if the required outcomes are not achieved soon it could be argued New Zealand is too small to supply electricity in a satisfactory manner via a market system. The alternative then is to consider re-instating a central supply authority. This bill represents half a chance of retaining the current structure - a review addressing the outstanding issues illustrated might well represent the other half. This time the Government would be well advised to heed the advice of ``do it once, do it right''. Appendix One Committee process The Electricity and Gas Industries Bill was referred to the committee on 6 November 2003. The closing date for submissions was 30 January 2004. We received and considered 33 submissions from interested groups and individuals. We heard 24 submissions, which included holding hearings in Auckland. Hearing of evidence took 11 hours 52 minutes and consideration took 13 hours and 39 minutes. We received advice from the Ministry of Economic Development. The Regulations Review Committee reported to the committee on the powers contained in clauses 8, 9, 10, and 45. Committee membership Mark Peck (Chairperson) Hon Roger Sowry (Deputy Chairperson) Brent Catchpole Brian Connell Russell Fairbrother Rodney Hide Hon Damien O'Connor H V Ross Robertson The following were replacement members for the consideration of the bill: Peter Brown (replacing Brent Catchpole) Hon Pete Hodgson Electricity and Gas Industries Bill Government Bill Contents 1 Title 2 Commencement Part 1 Amendments to Electricity Act 1992 3 Electricity Act 1992 called principal Act 4 Purposes 5 Interpretation 6 New heading and section 158G inserted Complaints resolution system 158G Complaints resolution system 7 New section 172A substituted 172A Outline of subpart 7A Low fixed charge tariff option for domestic consumers 8 New heading and section 172CA inserted Regulations---Reserve energy 172CA Reserve energy 9 New sections 172D to 172F substituted 172D Electricity governance regulations 172E Conditions and process for recommendations on electricity governance regulations 172F Assessment of proposed electricity governance regulations 10 Amendments consequential on merger of sections 172D to 172G by section 9 10A New sections 172KA to 172KP and headings inserted Provisions that apply if electricity governance regulations or rules are in force 172KA Transmission agreements 172KB Party must co-operate with investigations 172KC Privileges protected 172KD Limits on investigation powers 172KE Rulings Panel may make certain orders 172KF Restriction of remedies 172KFA Limit on tort claims against service providers Appeals 172KG Appeals on ground of lack of jurisdiction 172KH Judicial review not precluded 172KI Appeals on question of law in relation to decisions by Commission or Rulings Panel 172KJ Right of appeal against suspension or termination orders 172KK Persons entitled to appeal 172KL Determination of appeals 172KM High Court may refer appeals back to Commission or Rulings Panel for reconsideration 172KN Provisions pending determination of appeal 172KO High Court may order proceedings be heard in private 172KP Appeal to Court of Appeal in certain cases 10B Purpose 11 New section 172M substituted 172M Continuation of Commission 12 New section 172N substituted 172N Principal objectives and specific outcomes 13 New section 172O substituted 172O Functions of Commission 13A Section 172W repealed 13B New section 172X substituted 172X Objectives of recommendations 14 Section 172Y repealed 15 New section 172Z substituted 172Z Minister must have regard to recommendations 15A Sections 172ZA and 172ZB repealed 16 Levy of industry participants 16A New section 172ZCA inserted 172ZCA Commission must consult about request for appropriation 17 Amendments to Ombudsmen Act 1975 and Public Finance Act 1989 18 New subparts 2 and 3 substituted Subpart 2---Accountability of Electricity Commission 172ZJ Interpretation 172ZK Setting of GPS objectives and outcomes 172ZL Agreement of annual performance standards 172ZM Annual performance report to Minister 172ZN Minister must present annual performance report to House of Representatives 172ZO Assurance audit by Auditor-General 172ZP Report by Parliamentary Commissioner for Environment 172ZQ Functions under this subpart Subpart 3---Miscellaneous provisions 172ZR Specific authorisation for purposes of restrictive trade practices rules 18A Schedule 2A amended Transitional provision relating to reserve energy 19 Minister may direct Commission to enter contract relating to Whirinaki power station 19A Provisions relating to direction 19B Provisions relating to availability of contract Miscellaneous 20 Electricity Amendment Act 2001 amended Part 2 Amendments to Electricity Industry Reform Act 1998 21 Electricity Industry Reform Act 1998 called principal Act 22 Purpose of this Part 23 Interpretation 24 Meaning of electricity supply business 25 Corporate separation 26 Arms length rules 27 Purpose of sections 27A New heading substituted 27B Exemption for new generation from new renewable energy source 27C Section 46B repealed 28 New heading and section 46C inserted Exemptions for generation commissioned after 20 May 2003 and for reserve energy 46C Exemptions for generation commissioned after 20 May 2003 and for reserve energy 28A Section 56A repealed 29 Other Acts relating to price control not affected Part 3 Amendments to Commerce Act 1986 30 Commerce Act 1986 called principal Act 30A Interpretation 30B New section 57CA inserted 57CA Impact of certain decisions made under Gas Act 1992 31 New sections 57DA to 57DF inserted 57DA Body that exercises jurisdiction under this Part 57DB Transfer of jurisdiction in respect of Transpower 57DC Transfer of jurisdiction relating to other large electricity lines businesses 57DD Procedure before jurisdiction order can be made 57DE Levies during transition in jurisdiction 57DF Ministerial powers 32 New sections 57GA to 57GG inserted 57GA Incorporation by reference of material in thresholds 57GB Effect of amendments to, or replacement of, material incorporated by reference in thresholds 57GC Amendments to, or replacement of, material incorporated by reference to be of same general character as original material 57GD Proof of material incorporated by reference 57GE Effect of expiry of material incorporated by reference 57GF Requirement to consult 57GG Access to material incorporated by reference 33 Priorities 34 Authorisations and undertakings 35 New section 57MA inserted 57MA Impact of certain decisions made under Electricity Act 1992 36 Subpart 2 repealed 37 Sections relating to recalibration of asset values of large electricity line owners repealed 39 Consequential amendments to Ministry of Energy (Abolition) Act 1989 Part 4 Amendments to Gas Act 1992 40 Gas Act 1992 called principal Act Commencement of Energy Commission provisions 41 Process to apply before Energy Commission provisions may be commenced Amendments to principal Act 43 Title amended 45 New Part 4A inserted Part 4A Governance of Gas Industry Subpart 1---General and regulation-making powers Preliminary provisions 43AA Purpose 43AAB Outline of Part 43A Outline of regulation-making powers 43AB Interpretation Complaints resolution system 43B Complaints resolution system Gas industry regulation-making powers 43C Gas governance regulations for wholesale market, processing facilities, transmission, and distribution of gas 43E Other gas governance regulations 43F Low fixed charge tariff option for domestic consumers Process for making recommendations on gas governance regulations 43G Which gas governance regulations can be made if there is no industry body or Commission 43GA Which gas governance regulations can be made if there is industry body but no Commission 43GB Which gas governance regulations can be made if there is Commission 43GC Consultation before making recommendation on gas governance regulations 43GD Other process for making recommendations for gas governance regulations 43GE Assessment of proposed gas governance regulations 43GF Process after making recommendation for gas governance regulation 43GG Urgent regulations Gas governance rules 43H Gas governance rules 43I Method of making gas governance rules Supplementary provisions 43J Supplementary empowering provision for regulations and rules 43K Supplementary empowering provision for regulations Provisions that apply if gas governance regulations or rules are in force 43KA Party must co-operate with investigations 43KB Privileges protected 43KBA Limits on investigation powers 43KC Rulings Panel may make certain orders 43KD Restriction of remedies 43KDA Limit on tort claims against service providers Appeals 43KE Appeals on ground of lack of jurisdiction 43KF Judicial review not precluded 43KG Appeals on question of law in relation to decisions by industry body, Commission, or Rulings Panel 43KH Right of appeal against suspension or termination orders 43KI Persons entitled to appeal 43KJ Determination of appeals 43KK High Court may refer appeals back to industry body, Commission or Rulings Panel for reconsideration 43KL Provisions pending determination of appeal 43KM High Court may order proceedings be heard in private 43KN Appeal to Court of Appeal in certain cases Subpart 1A---Co-regulation of gas industry 43KO Purpose of subpart Approval of industry body 43KP Approval of industry body 43KQ Revocation of approval of industry body Objectives of industry body in relation to recommendations for gas governance regulations 43KR Objectives of industry body in recommending regulations for wholesale market, processing facilities, transmission, and distribution of gas GPS objectives and outcomes 43KS Setting of GPS objectives and outcomes 43KT What Minister can do with industry body recommendations about wholesale market, processing facilities, transmission, and distribution of gas Industry body strategic plan 43KU Industry body strategic plan 43KV Extra information required in strategic plan for first financial year 43KW Application and term of strategic plan 43KX Process for providing strategic plan to Minister 43KY Amendments by industry body 43KZ Strategic plan must be publicised Industry body annual report 43KZA Annual report 43KZB Disclosure of payments in respect of industry body board members and employees 43KZC Annual report must be presented in House of Representatives Miscellaneous provisions 43KZD Publication of industry body documents 43KZE Auditors Levy to fund industry body 43KZF Industry body recommendation for levy regulations 43KZG Costs that may be met from levy 43KZH Minister must accept recommendations if certain conditions met 43KZI Levy regulations that may be made 43KZJ Expiry of subpart Subpart 2---Governance of gas industry by Energy Commission Preliminary provisions 43L Purpose Energy Commission 43M Commission to govern gas industry established 43N Continuation of Commission's functions, objectives, etc 43O Additional principal objective of Energy Commission 43P Additional specific outcomes in relation to gas 43Q Additional functions 43R Additional duties of members Role of Energy Commission in relation to gas governance regulations and rules 43T Objectives of recommendations 43U Consultation and accountability sections apply 43V Levy of industry participants 43W Amendments to Ombudsmen Act 1975 and Public Finance Act 1989 Subpart 3---Exemptions from restrictive trade practice provisions of Commerce Act 1986 43X Authorisations for purposes of Commerce Act 1986 Part 5 Amendments to Crown Minerals Act 1991 46 Crown Minerals Act 1991 called principal Act 47 Functions of Minister of Energy 48 New section 90A inserted 90A Disclosure of petroleum reserves and production information to Secretary and publication by Secretary 49 Regulations The Parliament of New Zealand enacts as follows: 1 Title This Act is the Electricity and Gas Industries Act 2003. 2 Commencement (1) Section 20 (which relates to Transpower's transitional pricing methodology) {comes} [is deemed to have come] into force on 26 January 2004. (2) Part 2 is deemed to have come into force on 20 May 2003. (3) Subpart 2 of Part 4A of the Gas Act 1992 (as inserted by Part 4 of this Act) comes into force on a date to be appointed by the Governor-General by Order in Council on the recommendation of the Minister of Energy in accordance with section 41 of this Act. Struck out (majority) ======================================================================= (4) Section 43B of the Gas Act 1992 (as inserted by section 45 of this Act) comes into force on the date that is 6 months after the date on which subpart 2 of Part 4A of the Gas Act 1992 comes into force. ======================================================================= (5) The rest of this Act comes into force on the day after the date on which it receives the Royal assent. Part 1 Amendments to Electricity Act 1992 3 Electricity Act 1992 called principal Act In this Part, the Electricity Act 1992 1992 No 122 is called "the principal Act". 4 Purposes The principal purposes of this Part are--- (a) to improve security of supply of electricity: New (majority) ----------------------------------------------------------------------- (ab) to provide benefits for consumers of electricity: ----------------------------------------------------------------------- (b) to rationalise and extend the electricity governance regulation-making and rule-making powers to reflect the establishment of the Electricity Commission and the conditions in the industry requiring regulation: (c) to give new functions to the Electricity Commission: (d) to otherwise facilitate a regulated electricity industry. 5 Interpretation (1) Section 2(1) of the principal Act is amended by repealing the definitions of EGB, EGB's board or board, electricity governance organisation, electricity governance regulations, and industry participant. (2) Section 2(1) of the principal Act is amended by inserting, in their appropriate alphabetical order, the following definitions: "Commission means the Electricity Commission continued under subpart 1 of Part 15 "Commission's board or board, for the purposes of Part 15 and Schedule 2A, has the meaning set out in section 172Q "electricity governance regulations means regulations made under section 172D "industry participant means--- "(a) an electricity retailer: "(b) an electricity distributor: "(c) an electricity generator: "(d) a line owner: "(e) a person who uses electricity that is conveyed to the person directly from the national grid: "(f) a person who {purchases electricity from} [buys electricity on] the wholesale market: Struck out (majority) ======================================================================= "(g) a person or group of persons involved in the governance or administration of the electricity industry: ======================================================================= New (majority) ----------------------------------------------------------------------- "(g) a service provider appointed under any electricity governance regulations: "(h) a metering equipment owner: "(i) a data administrator ----------------------------------------------------------------------- but does not include the Commission (even to the extent that the Commission may be acting as a service provider after an appointment under electricity governance regulations) New (majority) ----------------------------------------------------------------------- "lines means works that are used or intended to be used for the conveyance of electricity "publicise, in relation to a document, means--- "(a) to make the document available to the public, at no cost, on a website maintained by or on behalf of the Commission, at all reasonable times; and "(b) to give notice of the document in the Gazette ----------------------------------------------------------------------- "reserve energy means energy that is secured by [contract (including by contracting for demand-side savings) by], or on behalf of, the Commission for the purpose of ensuring security of supply New (majority) ----------------------------------------------------------------------- "Rulings Panel means the Rulings Panel established under electricity governance regulations". ----------------------------------------------------------------------- 6 New [heading and] section 158G {and heading} inserted The principal Act is amended by inserting, after section 158F, the following heading and section: "Complaints resolution system "158G Complaints resolution system "(1) Every electricity distributor and every electricity retailer must participate in a complaints resolution system that is approved by the Commission for the purpose of addressing complaints by any person (including potential consumers and {landowners} [owners and occupiers of land]) relating to electricity retailers and electricity distributors. "(2) This section applies {at all times on and after 1 July 2004,} provided the Commission has approved 1 or more complaints resolution system{s} [by notice in the Gazette]." 7 New section 172A substituted The principal Act is amended by repealing section 172A, and substituting the following section: Struck out (majority) ======================================================================= "172A Outline of subpart "(1) In this subpart, the principal regulation-making powers are as follows: "(a) regulations may be made under section 172B on a low fixed charge tariff option or options for domestic consumers, under section 172C on a code on access for beneficiaries of customer and community trusts, and under section 172CA on reserve energy: "(b) electricity governance regulations and rules may be made under sections 172D and 172H: "(c) under section 172E, electricity governance regulations and rules may be made only to implement the substantive effect of a recommendation by the Commission and in accordance with the process in that section: "(d) supplementary electricity governance regulations and rules may be made under sections 172J and 172K. "(2) This section is intended only as a guide to the general scheme and effect of the principal regulation-making powers in this Part." ======================================================================= New (majority) ----------------------------------------------------------------------- "172A Outline of subpart "(1) In this subpart, the principal regulation-making powers are as follows: Type of regulations How they can be made 1 Regulations on a low fixed charge Can be made at any time, whether or tariff option or options for domestic not the Electricity Commission has consumers under section 172B made a recommendation 2 Regulations on a code on access for beneficiaries of customer and community trusts under section 172C 3 First regulations on reserve energy under section 172CA 4 First regulations on distributed generation under section 172D(1)(10) All other regulations, for example, on Can be made only for transitional wholesale, generation, transmission, and purposes or to implement the retail issues effect of a recommendation by the Electricity Commission. "(2) This section is intended only as a guide to the general scheme and effect of the principal regulation-making powers in this Part." ----------------------------------------------------------------------- New (majority) ----------------------------------------------------------------------- 7A Low fixed charge tariff option for domestic consumers (1) Section 172B(2) of the principal Act is amended by adding the following definition: "low-use consumer means a domestic consumer who purchases less than 8000 kWh per year in respect of any domestic premises". (2) Section 172B(3)(a) is amended by omitting the words "or proportion calculated by reference to the total charge of the average or median domestic consumer". (3) Section 172B(3) of the principal Act is amended by repealing paragraph (b), and substituting the following paragraph: "(b) regulating the variable (cents per kilowatt hour) charges in those required low fixed charge tariff options to ensure that low-use consumers would pay a lower total charge on that tariff option than on any similar alternative tariff option available from that electricity provider:". (4) Section 172B of the principal Act is amended by inserting, after subsection (3), the following subsections: "(3A) No electricity provider that is a customer trust or a community trust may pay a low-use consumer who is on the required low fixed charge tariff option a different rebate only because the consumer is on that tariff option. "(3B) Each trustee of an electricity provider that contravenes subsection (3A) commits an offence, and is liable on summary conviction to a fine not exceeding $20,000." (5) Section 172B is amended by repealing subsection (6). (6) Section 172B(7) of the principal Act is amended by adding the following paragraph: "(d) regulating the charging, offering, supply, and availability of delivered electricity by other electricity providers." (7) Section 172B(8) is amended by repealing paragraph (b). ----------------------------------------------------------------------- 8 New [heading and] section 172CA {and heading} inserted The principal Act is amended by inserting, after section 172C, the following heading and section: "Regulations---Reserve energy "172CA Reserve energy "(1) The Governor-General may, by Order in Council made on the recommendation of the Minister, make regulations in respect of the securing and use of reserve energy, including--- "(a) types of reserve energy to be secured and procedures to be followed in securing reserve energy; and "(b) conditions of securing and using reserve energy; and "(c) circumstances in which, and terms (including volume and price) on which, reserve energy must or may be offered on the wholesale market. "(2) The Minister may make a recommendation under this section in relation to the first Order in Council made under this section without the Commission having made a recommendation on the matter. "(3) Section 172E {applies in relation to each subsequent} [otherwise applies to each] Order in Council made under this section as if regulations under this section were electricity governance regulations and with all necessary modifications." 9 New sections 172D {and} [to] 172{E} [F] substituted The principal Act is amended by repealing sections 172D to 172G, and substituting the following sections: "172D Electricity governance regulations "(1) The Governor-General may, by Order in Council made on the recommendation of the Minister in accordance with section 172E, make regulations for all or any of the following purposes: "Wholesale market "(1) providing for the establishment and operation of [competitive] wholesale markets for electricity, including for--- "(a) {pricing} [discovery of prices] and determining quantities of electricity for market transactions: "(b) clearing, settling, and reconciling market transactions: "(c) scheduling and dispatching electricity: "(d) disclosure of market information: "(e) disclosure of information on hedge and contract volumes and prices: "(f) the promotion of hedge (including futures) markets: "(g) minimum prudential standards for market participation: "(h) minimum standards of market conduct: "Generation "(2) providing for generation of electricity and management of supply and price risks [in a competitive market], including for--- "(a) electricity generators to hold or provide for reserve fuels (including water): "(b) electricity generators to offer by tender a minimum volume of contracts that enable the price risks associated with the spot market to be managed, including for the terms and conditions of those contracts (excluding prices and reserve prices): "(c) electricity generators to post buy and sell prices for hedge (including futures) contracts: "(d) disclosure of information on hydro lake levels and inflows, thermal fuel stockpiles, supply contracts for thermal fuels (excluding price), capacity to generate, and proposed outages: "(e) disclosure of offers into the spot market by electricity generators: "(f) disclosure of information on spill from hydro dams: "Transmission "(3) setting standards and making provision for common quality and minimum real-time security on the [national] grid, and requiring industry participants to comply with those standards: "(4) setting quality and security standards for the transmission system or parts of the transmission system, or for the use of that system or part, and requiring industry participants to comply with those standards: "(5) prescribing reasonable terms and conditions on which Transpower must enable distribution lines, and electricity generators and users of electricity, to be connected to the national grid, and that must be complied with in connecting to the national grid: "(6) regulating the way in which expansions, replacements, or upgrades of the national grid or parts of the national grid must be evaluated, carried out, and funded, including specifying--- "(a) the circumstances in which Transpower must generally carry out expansions, replacements, or upgrades: "(b) particular expansions, replacements, or upgrades that Transpower must carry out: "(c) the methodology on which costs for expansions, replacements, or upgrades must be allocated among industry participants, or the actual allocation of those costs, and providing for their payment by industry participants: "(d) obligations for Transpower to report in relation to forecasts of medium-term system adequacy to assist in identifying opportunities for the use of alternatives to expansions, replacements, or upgrades: "(7) requiring the use by Transpower of a specified methodology or component of a methodology for allocating Transpower's revenue requirement to individual electricity generators, electricity retailers, electricity distributors, line owners, customers, or consumers, or classes of any of those persons, including--- "(a) defining the charges for any of those persons or classes of any of those persons: "(b) imposing quality standards generally or in respect of the supply of transmission services to any of those persons or classes of any of those persons: "(c) requiring a specified person or class of persons receiving (either directly or indirectly) goods or services from Transpower to pay a specified amount or proportion of the total price, or the total price, for those goods or services: "(d) authorising a way or ways in which Transpower may apply the methodology: "(8) providing for financial instruments for managing risks relating to transmission losses and constraints: "Distribution and retailing "(9) providing for a price methodology or methodologies for recovery of the revenue requirements of electricity distributors: "(10) providing for terms and conditions {for connection of distributed generation to distribution lines} [ on which line owners and electricity distributors must enable electricity generators to be connected to distribution lines]: "(11) providing for requirements on buyers of electricity {from} [on] the wholesale market to do either or both of the following: "(a) maintain minimum levels of hedge and contract cover with electricity generators: "(b) maintain minimum levels of demand-side management programmes and interruptible load: "(12) providing for establishing and operating markets for exchange of demand-side savings: "(13) providing for the use of ripple control of hot water heating for security of supply or load management purposes: "(14) providing for the management and co-ordination of outages for security of supply {or electricity conservation} purposes: "(15) providing for terms and conditions for the use of lines and related services by electricity retailers: "(16) providing for the reconciliation of, and payment for, losses of electricity from distribution lines: "(17) providing for the disclosure of information by electricity retailers and electricity distributors on tariffs and other charges: "(18) providing for arrangements to enable consumers to switch electricity retailers: "(19) providing for arrangements for consumers in the event of insolvency of electricity retailers: "(20) providing for terms and conditions for access to electricity meters by electricity retailers: "(21) providing for the introduction of time-of-use meters: "(22) providing for terms and conditions on which electricity retailers must offer prepayment meters to domestic consumers: "(23) providing for terms and conditions [(including metering arrangements)] for purchase by electricity retailers of surplus electricity generated by generating units [that are] owned or operated by a consumer {that consumes} [and that have an electricity generating capacity of] less than 40 000 kWh in any financial year, subject to the electricity retailer not incurring [ongoing] financial losses as a result of those terms and conditions: "(24) providing for the provision of information on customer accounts: "(25) providing for minimum terms and conditions in contracts between domestic consumers and electricity retailers or electricity distributors: "(26) providing for the use of bonds by electricity retailers and electricity distributors: "(27) providing for the establishment of, and participation by electricity distributors and electricity retailers in, a complaints resolution system (which may include codes of practice) for the purpose of addressing complaints by any person (including potential consumers and {landowners} [owners and occupiers of land]) relating to electricity retailers and electricity distributors, and setting out minimum requirements in relation to {those systems, including provision for awards of compensation of up to a maximum of $20,000 and for appeals:} [that system, including---] ["(a) provision for compensation up to a maximum of $20,000 to be awarded, and other actions to be taken, by the complaints resolution agency in relation to those complaints:] ["(b) provision for rights of review, or rights of appeal on a question of law only, in relation to decisions relating to those complaints:] "Dispute resolution procedures "(28) providing procedures for resolving disputes between industry participants: "(29) providing for the operation and facilitation of those dispute resolution procedures by a person, and the powers and procedures of that person: "Process "(30) providing for processes for settling particular issues within the electricity industry that may result in recommendations for electricity governance regulations or rules, and requiring compliance by industry participants and the Commission with those processes, including compliance with requirements to produce documents as part of those processes: "Enforcement of electricity governance regulations "(31) providing for compliance with electricity governance regulations and rules to be monitored and enforced by the Commission or any other person or court, and the powers and procedures of that person or court. "(2) In subsection (1)(2), electricity generator means a person who owns or operates assets that, whether taken individually or as a whole, have a rated electricity generating capacity equal to, or greater than, 10 {megawatts} [MW]. "(3) The Commission and the Minister must ensure, before making a recommendation for any regulations {or rules} under subsection (1)(2), that those regulations {or rules} do not provide for undue discrimination between electricity generators. "172E Conditions and process for recommendations on electricity governance regulations Struck out (majority) ======================================================================= "(1) The Minister may recommend electricity governance regulations under section 172D only if the recommendation implements the substantive effect of a recommendation by the Commission to the Minister. ======================================================================= New (majority) ----------------------------------------------------------------------- "(1) The Minister may recommend electricity governance regulations under section 172D (other than the first regulations made under section 172D(1)(10)) only if the recommendation--- "(a) implements the effect of a recommendation of the Commission; and "(b) does not differ from that recommendation in any material way (for example, other than in matters of drafting style or minor detail). ----------------------------------------------------------------------- "(2) The following {process} applies to recommendations by the {Minister and the} Commission concerning those regulations: "(a) sections {172W} [172X] to 172Z apply {in relation to the Commission's recommendation}; and "(b) before making a recommendation, the Commission must consult with persons that the Commission thinks are representative of the interests of persons likely to be substantially affected by the proposed regulations; and Struck out (majority) ======================================================================= "(c) the Commission and the Minister must each, before making a recommendation, have regard to the principal objective and specific outcomes in section 172N: "(d) before making a recommendation concerning regulations under section 172D(1)(18) to (27), the Minister must consult with the Minister of Consumer Affairs: ======================================================================= New (majority) ----------------------------------------------------------------------- "(c) before making a recommendation, the Commission must undertake an assessment under section 172F; and "(d) No later than 10 working days after making a recommendation, the Commission must publicise the recommendation and the assessment completed under section 172F; and ----------------------------------------------------------------------- "(e) section 57MA(1) of the Commerce Act 1986 [(which requires the Commission to advise the Commerce Commission of any recommendation that is likely to affect certain of the powers of the Commerce Commission under that Act)] applies. "(3) Subsection (2)(b) [(which relates to consultation)] does not apply if the Commission considers that it is necessary or desirable in the public interest that the proposed regulations be made urgently, and, in this case, the recommendation must state that it is made in reliance on this subsection and then, within 6 months of those regulations being made,--- Struck out (majority) ======================================================================= "(a) the Commission must consult on the regulations in accordance with subsection (2)(b); and ======================================================================= New (majority) ----------------------------------------------------------------------- "(a) the Commission must--- "(i) consult on the regulations in accordance with subsection (2)(b); and "(ii) make a recommendation to the Minister on whether or not the regulations should be revoked, replaced, or amended; and "(iii) No later than 10 working days after making the recommendation, publicise the recommendation and the assessment completed under section 172F; and ----------------------------------------------------------------------- "(b) after {that consultation} [receiving that recommendation], the Minister must publish a notice in the Gazette stating whether or not he or she decides to recommend the revocation, replacement, or amendment of the regulations and explaining the reasons for that decision, or stating where copies of that explanation may be obtained,--- and then within a further 6 months, the Minister must make that recommendation. "(4) A regulation {or rule} that is found by a court to be invalid solely because of a contravention of subsection (2)(b) [or subsection (5)] may not be declared to be invalid with effect earlier than 6 months after the date of the declaration. New (majority) ----------------------------------------------------------------------- "(5) The Minister must, before making a recommendation concerning regulations under section 172D(1)(18) to (27), consult with the Minister of Consumer Affairs. ----------------------------------------------------------------------- New (majority) ----------------------------------------------------------------------- "172F Assessment of proposed electricity governance regulations "(1) Before making a recommendation to the Minister on an electricity governance regulation, the Commission must--- "(a) seek to identify all reasonably practicable options for achieving the objective of the regulation; and "(b) assess those options by considering--- "(i) the benefits and costs of each option; and "(ii) the extent to which the objective would be promoted or achieved by each option; and "(iii) any other matters that the Commission considers relevant; and "(c) ensure that the objective of the regulation is unlikely to be satisfactorily achieved by any reasonably practicable means other than the making of the regulation (for example, by education, information, or voluntary compliance); and "(d) give a statement of the proposal to the persons, or representatives of those persons, that the Commission considers will be substantially affected by the regulation; and "(e) consult with those persons and give them the opportunity to make submissions; and "(f) consider those submissions. "(2) The statement of the proposal referred to in subsection (1)(d) must contain--- "(a) a detailed statement of the proposal; and "(b) a statement of the reasons for the proposal; and "(c) an assessment of the reasonably practicable options, including the proposal, identified under subsection (1); and "(d) other information that the Commission considers relevant. "(3) The Commission is not required to comply with subsection (1) if it is satisfied that--- "(a) a recommendation needs to be made urgently in relation to the regulation; or "(b) the effect of the recommendation is minor and will not adversely affect the interests of any person in a substantial way." ----------------------------------------------------------------------- 10 Amendments consequential on merger of sections 172D to 172G by section 9 Struck out (majority) ======================================================================= (1) Section 172H(3) of the principal Act is amended--- (a) by omitting the words "or section 172G"; and (b) by omitting the words "those sections apply", and substituting the words "that section applies". ======================================================================= New (majority) ----------------------------------------------------------------------- (1) Section 172H(3) of the principal Act is amended by omitting the words "section 172E or section 172G", and substituting the words "section 172D(3), section 172E, or section 172F". (1A) Section 172H of the principal Act is amended by repealing subsection (7), and substituting the following subsection: "(7) A rule that is found by a court to be invalid solely because of a contravention of subsection (2) may not be declared to be invalid with effect earlier than 6 months after the date of the declaration." ----------------------------------------------------------------------- (2) Sections 172J and 172K of the principal Act are amended by omitting the words "sections 172B to 172F" {in each case} where they {occur} [appear], and substituting in each case the words "sections 172B to 172D". Struck out (majority) ======================================================================= (3) Section 172W of the principal Act is amended by repealing subsection (1), and substituting the following subsection: "(1) The Commission must, in accordance with this subpart, formulate and make recommendations concerning regulations or rules under sections 172D and 172H." (4) Section 172X(c) of the principal Act is amended by omitting the words "to objectives in accordance with sections 172E(2)(c) and 172G(2)(e)", and substituting the words "to specific outcomes in accordance with section 172N(2)". ======================================================================= New (majority) ----------------------------------------------------------------------- 10A New sections 172KA to 172KP and headings inserted (1) The principal Act is amended by inserting, after section 172K, the following heading and sections: "Provisions that apply if electricity governance regulations or rules are in force "172KA Transmission agreements "(1) The Commission or the Rulings Panel, or electricity governance regulations or rules, may direct Transpower, and 1 or more industry participants, to enter into 1 or more transmission agreements for connection to, use of, and (where relevant) investment in, the national grid. "(2) The terms of those transmission agreements may be set by the Commission or the Rulings Panel or prescribed in those regulations or rules. "(3) Those transmission agreements are binding on both parties and are enforceable as if they were contracts between the parties that were freely and voluntarily entered into. "(4) If the parties do not comply with the direction, the terms set by the Commission or the Rulings Panel, or prescribed in those regulations or rules, are also binding on both parties and enforceable as if they were such a contract. "(5) The terms may be amended or replaced, but only by mutual consent of the parties. "(6) The consultation, dispute resolution, and other procedural provisions that apply to mandatory or default transmission agreements are contained in electricity governance regulations or rules. "172KB Party must co-operate with investigations Every industry participant must co-operate fully with any investigation carried out, for the purposes of monitoring or enforcing any electricity governance regulations or rules, by the Commission, or by an investigator appointed under those regulations,--- "(a) by providing, within any reasonable time specified by the Commission or the investigator, all information, papers, recordings, and documents concerning the matter that are in the possession, or under the control, of the industry participant and that are requested for the purpose of the investigation; and "(b) by permitting its officers or other employees to be interviewed (which interview may be recorded) and by ensuring as far as possible that they are made available for interview and answer truthfully and fully any questions put to them; and "(c) by giving to the Commission, or any person authorised by the Commission, at all reasonable times, full access to any premises (subject to complying with any safety requirements that apply to visitors to those premises) at which the industry participant carries on business or maintains records; and "(d) by giving all other assistance that may be reasonable and necessary to enable the matter to be fully investigated. "172KC Privileges protected "(1) Section 172KB does not limit any claim for legal professional privilege. "(2) A person is not excused from answering a question or giving any information or document on the ground that to do so may incriminate or tend to incriminate that person. "(3) However, a self-incriminating statement or document made or given--- "(a) is not admissible as evidence in criminal or civil proceedings against that person; and "(b) may not be used against the person in any proceedings before the Rulings Panel, except for information provided under any self-reporting obligation under those regulations. "172KD Limits on investigation powers "(1) The Commission may authorise, in writing, any person or persons to exercise all or any of the powers referred to in section 172KB(b) or (c) in respect of an industry participant. "(2) An authorised person must, before entering premises under section 172KB(c), give reasonable notice to the owner or occupier of the premises (at least 4 days before entry) of his or her intention to enter the premises. "(3) An authorised person must, on first entering any premises under section 172KB(c) and, if requested, at any later time, produce to the person apparently in charge of the premises the authorisation under subsection (1). "(4) If an authorised person enters any premises under section 172KB(c) and is unable, despite reasonable efforts, to find any person apparently in charge, the authorised person must, before leaving the premises, leave a written notice stating--- "(a) the authorised person's identity; and "(b) the address of premises where the authorised person may be contacted; and "(c) the date and time of entry; and "(d) the reasons for entering. "(5) Section 172KB(c) does not authorise an authorised person to enter a home, except with the consent of an occupier or under the authority of a warrant. "(6) An authorised person may apply for a warrant by written application on oath. "(7) A District Court Judge, Justice, or Community Magistrate, or a Court Registrar (not being a constable) who is satisfied that there are reasonable grounds to believe that it is necessary, for the purpose of ascertaining whether or not an industry participant has breached, or may breach, the electricity governance regulations or rules, for an authorised person to search any place may, by warrant, authorise that person to search a place specified in the warrant. "172KE Rulings Panel may make certain orders "(1) The Rulings Panel may, after considering any complaint or matter referred to it in respect of an allegation that an industry participant has breached any electricity governance regulations or rules,--- "(a) decide that no action should be taken: "(b) issue a private warning or reprimand to an industry participant: "(c) issue a public warning or reprimand to an industry participant: "(d) impose additional or more stringent record-keeping or reporting requirements under or in connection with any electricity governance regulation or rule: "(e) order an industry participant to pay a civil pecuniary penalty not exceeding $20,000: "(f) order an industry participant to pay a sum by way of compensation to any other person: "(g) order an industry participant that is found not to be complying with any electricity governance regulations or rules to take any action that is necessary to restore it to a position of compliance: "(h) make an order terminating or suspending the rights of an industry participant under any electricity governance regulation or rule: "(i) make orders regarding the reasonable costs of any investigations or proceedings: "(j) propose to the Commission that it recommend to the Minister that a change should be made to a regulation or rule. "(2) In making any such decision, the Rulings Panel must take into account its previous decisions in respect of any similar situations previously dealt with by the Commission or the Rulings Panel. "172KF Restriction of remedies "(1) The remedies provided for in section 172KE and in the electricity governance regulations and rules are the only remedies in respect of a breach of those regulations or rules. "(2) No one can bring an action for breach of statutory duty that arises out of, or relates to, a breach of those regulations or rules by an industry participant. "(3) This section does not limit the recovery of--- "(a) a debt owing under any electricity governance regulations or rules; or "(b) damages in tort other than breach of statutory duty, for breach of contract, or for any other wrong, that arises from any act or omission that is also a breach of those regulations or rules. Compare: SR 2003/374 r 6 "172KFA Limit on tort claims against service providers "(1) No industry participant may bring an action in tort against a service provider that arises out of, or relates to, any act, matter, or thing done, or required or omitted to be done, by the service provider in its role as service provider, provided that the act or omission is not a fraudulent act or omission by the service provider. "(2) Service provider means a service provider appointed under the electricity governance regulations. "Appeals "172KG Appeals on ground of lack of jurisdiction An industry participant affected by a decision of the Rulings Panel may appeal that decision to the High Court on the ground of lack of jurisdiction. "172KH Judicial review not precluded Nothing in this Act limits access to the courts in an action for judicial review. "172KI Appeals on question of law in relation to decisions by Commission or Rulings Panel "(1) There is a right of appeal to the High Court on a question of law only against a decision of the Commission or the Rulings Panel under any electricity governance regulations or rules. "(2) The appeal must be made by giving notice of appeal within 20 working days after the date of the decision appealed against or within any further time that the Court allows. "172KJ Right of appeal against suspension or termination orders "(1) An industry participant in respect of which a suspension order or termination order is made may appeal to the High Court against the order. "(2) The appeal must be made by giving notice of appeal within 20 working days after the date of the order appealed against or within any further time that the Court allows. "172KK Persons entitled to appeal The Commission, and the following industry participants, may exercise a right of appeal under this Part: "(a) an industry participant in whose favour or against whom a decision or order of the Commission or the Rulings Panel is made: "(b) an industry participant who was a party to a dispute that was determined by the Commission or the Rulings Panel: "(c) any industry participant who joined as a party to the investigation of the matter that is subject to the appeal. "172KL Determination of appeals In its determination of any appeal (other than an appeal to the High Court by way of case stated for the opinion of the Court on a question of law only), the High Court may do any 1 or more of the following things: "(a) confirm, modify, or reverse the decision or any part of it: "(b) exercise any of the powers that could have been exercised by the Commission or the Rulings Panel in relation to the matter to which the appeal relates. Compare: 1986 No 5 s 93 "172KM High Court may refer appeals back to Commission or Rulings Panel for reconsideration "(1) The High Court may, in any case, instead of determining any appeal, direct the Commission or the Rulings Panel to reconsider, either generally or in respect of any specified matters, the whole or any specified part of the matter to which the appeal relates. "(2) In giving any direction under this section, the Court must--- "(a) advise the Commission or the Rulings Panel, as the case may be, of its reasons for doing so; and "(b) give to the Commission or the Rulings Panel, as the case may be, any directions that it thinks just concerning the reconsideration or otherwise of the whole or any part of the matter that is referred back. "(3) In reconsidering the matter, the Commission or the Rulings Panel, as the case may be, must have regard to the Court's reasons for giving the direction, and the Court's directions. Compare: 1986 No 5 s 94 "172KN Provisions pending determination of appeal If an appeal is brought against any decision of the Commission or the Rulings Panel, the decision to which the appeal relates remains in full force pending the determination of the appeal, unless the High Court orders to the contrary. Compare: 1986 No 5 s 95 "172KO High Court may order proceedings be heard in private "(1) The High Court may, in its discretion, order that the hearing or any part of the hearing of any proceedings under this Part be held in private. "(2) The High Court may make an order prohibiting the publication of any report or description of proceedings or any part of proceedings (whether heard in public or in private), but no order may prohibit the publication of any determination of the Court. Compare: 1986 No 5 s 96 "172KP Appeal to Court of Appeal in certain cases "(1) Any party to any appeal before the High Court against any decision of the Commission or the Rulings Panel, as the case may be, who is dissatisfied with any decision or order of the High Court may, with the leave of the High Court or of the Court of Appeal, appeal to the Court of Appeal. "(2) Section 66 of the Judicature Act 1908 applies to the appeal. "(3) In determining whether to grant leave to appeal under this section, the court to which the application for leave is made must have regard to the following matters: "(a) whether any question of law or general principle is involved: "(b) the importance of the issues to the parties: "(c) the amount of money in issue: "(d) any other matters that in the particular circumstances the court thinks fit. "(4) The court granting leave may, in its discretion, impose any conditions that it thinks fit, whether as to costs or otherwise. Compare: 1986 No 5 s 97". (2) The Electricity Governance Regulations 2003 (SR 2003/374) are consequentially amended by revoking regulations 6, 79, 80, 81, 107, and Part 9. ----------------------------------------------------------------------- New (majority) ----------------------------------------------------------------------- 10B Purpose (1) Section 172L(a) of the principal Act is amended by omitting the words "enable the establishment of the Electricity Governance Board", and substituting the words "provide for the Electricity Commission". (2) Section 172L(a)(i) of the principal Act is amended by omitting the words "promote its principal objective", and substituting the words "give effect to its principal objectives and specific outcomes". ----------------------------------------------------------------------- 11 New section 172M substituted (1) The principal Act is amended by repealing section 172M, and substituting the following section: "172M Continuation of Commission "(1) There continues to be an organisation to be called the Electricity Commission. New (majority) ----------------------------------------------------------------------- "(1A) The Commission is a Crown entity for the purposes of the Public Finance Act 1989. ----------------------------------------------------------------------- "(2) The Commission is the same body as the Electricity Governance Board established under section 172M as in force immediately before its substitution by section 11 of the Electricity and Gas Industries Act 2003." (2) The principal Act is amended by omitting every reference to "EGB", and substituting in each case a reference to "the Commission". (3) {Sections 172I(4) and 172ZI(1)(a)} [Section 172I(4)] of the principal Act {are} [is] amended by omitting the words ", if it is established,". (4) Sections 3 to 5 of the Electricity Amendment Act 2001 are repealed. 12 New section 172N substituted The principal Act is amended by repealing section 172N, and substituting the following section: "172N Principal objectives and specific outcomes Struck out (majority) ======================================================================= "(1) The principal objective of the Commission in relation to electricity is to ensure that electricity is generated, conveyed, and supplied to all classes of consumers in an efficient, fair, reliable, and environmentally sustainable manner. ======================================================================= New (majority) ----------------------------------------------------------------------- "(1) The principal objectives of the Commission in relation to electricity are--- "(a) to ensure that electricity is produced and delivered to all classes of consumers in an efficient, fair, reliable, and environmentally sustainable manner; and "(b) to promote and facilitate the efficient use of electricity. ----------------------------------------------------------------------- "(2) Consistent with {this principal objective} [those principal objectives], the Commission must seek to achieve, in relation to electricity, the following specific outcomes: "(a) energy and other resources are used efficiently: "(b) risks (including price risks) relating to security of supply are properly and efficiently managed: "(c) barriers to competition in the electricity industry are {reduced} [minimised] for the long-term benefit of end-users: "(d) incentives for investment in generation, transmission, lines, energy efficiency, and demand-side management are maintained [or enhanced] and do not discriminate between public and private investment: "(e) the full costs of producing and transporting each additional unit of electricity are signalled: "(f) delivered electricity costs and prices are subject to sustained downward pressure: "(g) the electricity sector contributes to achieving the Government's climate change objectives by minimising hydro spill, efficiently managing transmission and distribution losses and constraints, promoting demand-side management and energy efficiency, and removing barriers to investment in new generation technologies, renewables, and distributed generation." Struck out (majority) ======================================================================= 13 Functions of Commission (1) Section 172O(1) of the principal Act is amended by repealing paragraphs (c) and (d), and substituting the following paragraphs: "(c) establish, operate, and facilitate the operation of markets for either or both of industry participants and consumers: "(ca) use reasonable endeavours to ensure security of supply without assuming any reduction in demand from emergency conservation campaigns, while minimising distortions to the normal operation of the market: "(cb) undertake forecasting and modelling of future electricity supply and demand: "(cc) promote the efficient use and conservation of electricity: "(cd) manage emergency conservation campaigns to avoid material risk of supply shortages: "(ce) approve 1 or more complaints resolution systems for the purpose of section 158G: "(d) develop best practice methodologies and other standards and model agreements for use by industry participants:". (2) Section 172O of the principal Act is amended by adding the following subsection: "(3) The Commission's functions, in particular those in subsection (1)(c) and (ca), may be met by contracting with other parties, entering into a joint venture or contractual arrangement in respect of reserve energy and other things, or other means." ======================================================================= New (majority) ----------------------------------------------------------------------- 13 New section 172O substituted The principal Act is amended by repealing section 172O, and substituting the following section: "172O Functions of Commission "(1) The functions of the Commission are to--- "(a) formulate and make recommendations concerning electricity governance regulations and rules in accordance with this Act: "(b) administer, monitor compliance with, investigate, enforce, and apply penalties or other remedies for contraventions of electricity governance regulations and rules: "(c) establish, operate, and facilitate the operation of markets for industry participants or consumers, or both: "(d) use reasonable endeavours to ensure security of supply (including contracting for reserve energy), without assuming any reduction in demand from emergency conservation campaigns, while minimising distortions to the normal operation of the market: "(e) undertake forecasting and modelling of future electricity supply and demand: "(f) promote and facilitate the efficient use and conservation of electricity (including funding programmes that provide incentives for cost-effective energy efficiency and conservation): "(g) manage emergency conservation campaigns to avoid material risk of supply shortages: "(h) approve 1 or more complaints resolution system for the purpose of section 158G: "(i) develop best practice methodologies and other standards and model agreements for use by industry participants: "(j) give effect to GPS objectives and outcomes: "(k) provide advice to the Minister on matters concerning the electricity industry. "(2) The Commission's functions may be carried out by contracting with other parties, entering into a joint venture or contractual arrangement in respect of reserve energy and other things, or other means." ----------------------------------------------------------------------- New (majority) ----------------------------------------------------------------------- 13A Section 172W repealed The principal Act is amended by repealing section 172W. ----------------------------------------------------------------------- New (majority) ----------------------------------------------------------------------- 13B New section 172X substituted The principal Act is amended by repealing section 172X, and substituting the following section: "172X Objectives of recommendations In formulating recommendations for electricity governance regulations and rules, the Commission must give effect to its principal objectives and specific outcomes and its GPS objectives and outcomes." ----------------------------------------------------------------------- 14 Section [172Y] repealed The principal Act is amended by repealing section 172Y. 15 New section 172Z substituted The principal Act is amended by repealing section 172Z, and substituting the following section: Struck out (majority) ======================================================================= "172Z Minister must have regard to recommendations "(1) The Minister must have regard to a recommendation by the Commission in exercising any of his or her powers or functions in relation to electricity governance regulations or rules, but may, if he or she considers that the principal objective and specific outcomes of the Commission will be better met by doing so, do any of the following: "(a) decide not to act on that recommendation: "(b) defer, for any period, making a decision on the recommendation: "(c) refer the Commission's recommendation back to the Commission for further consideration by the Commission: "(d) make a recommendation that departs from the Commission's recommendation, provided that the Minister's recommendation implements the substantive effect of the Commission's recommendation. "(2) If the Minister decides to do anything referred to in subsection (1)(a) to (d), the Minister must publish a notice in the Gazette stating his or her decision and explaining the reasons for it or where copies of that explanation may be obtained." ======================================================================= New (majority) ----------------------------------------------------------------------- "172Z Minister must have regard to recommendations "(1) The Minister must have regard to a recommendation by the Commission in exercising any of his or her functions or powers in relation to electricity governance regulations or rules. "(2) Section 172E applies to the Minister's power to recommend electricity governance regulations. "(3) In addition, the Minister may, if he or she considers that the principal objectives and specific outcomes of the Commission will be better given effect to by doing so, within 90 working days of receiving the recommendation, do either or both of the following: "(a) decide not to act on that recommendation: "(b) refer the Commission's recommendation back to the Commission for further consideration by the Commission. "(4) The Minister must publish a notice in the Gazette, within 10 working days of deciding what to do with a Commission recommendation, explaining the reasons for the decision or where copies of that explanation may be obtained." ----------------------------------------------------------------------- New (majority) ----------------------------------------------------------------------- 15A Sections 172ZA and 172ZB repealed The principal Act is amended by repealing sections 172ZA and 172ZB and the heading above section 172ZA. ----------------------------------------------------------------------- 16 Levy of industry participants (1) Section 172ZC of the principal Act is amended by repealing subsection (1), and substituting the following subsections: "(1) Every industry participant (or prescribed class of industry participant) must pay to the Commission on behalf of the {Minister} [Crown] a levy prescribed by regulations under section 172ZE. "(1A) The levy must be prescribed on the basis that the following costs should be met fully out of the levy: "(a) the estimated costs of performing the Commission's functions, powers, and duties under this Act [and any other Act], including the Commission's costs in relation to endeavouring to ensure security of supply (which includes any costs incurred by the Commission as a result of {an Order in Council made} [any contract entered into] under section 19 of the Electricity and Gas Industries Act 2003 in respect of reserve energy); and "(b) the costs incurred by Transpower to fund the MACQS reform process (including establishment of MACQS, grid security committee costs, and related rule development) together with interest at the rate of 8% per annum calculated and capitalised annually; and "(c) the costs of collecting the levy money. New (majority) ----------------------------------------------------------------------- "(1B) The levy may be prescribed on the basis that any actual cost that could have been, but has not been, recovered as a levy shortfall for a year may be recovered (along with any financing charge) over any period of up to 5 years." (1A) Section 172ZC(2) of the principal Act is amended by omitting the words "under that section". ----------------------------------------------------------------------- (2) Section 172ZC(2) of the principal Act is amended by repealing paragraph (a), and substituting the following paragraph: "(a) specify the amount of levies or method of calculating or ascertaining the amount of levies:". New (majority) ----------------------------------------------------------------------- (2A) Section 172ZC of the principal Act is amended by inserting, after subsection (2), the following subsection: "(2A) The levy for a financial year that starts after the Commission begins to carry out any additional function under this Act or any other Act may cover the costs of performing that additional function, irrespective of the fact that the regulations may be made and come into effect after that date." ----------------------------------------------------------------------- (3) Section 172ZC(3) of the principal Act is amended by omitting the words "debt due to the Crown", and substituting the words "debt due to the {Electricity} Commission on behalf of the Crown". New (majority) ----------------------------------------------------------------------- (3A) Section 172ZC of the principal Act is amended by repealing subsection (4). ----------------------------------------------------------------------- (4) Section 172ZC is amended by adding the following subsection:" "(5) The Commission must, as soon as practicable after receiving any levy payment, pay it into the Crown Bank Account and separately account for each payment." New (majority) ----------------------------------------------------------------------- 16A New section 172ZCA inserted The principal Act is amended by inserting, after section 172ZC, the following section: "172ZCA Commission must consult about request for appropriation "(1) The Commission must, before submitting a request to the Minister seeking an appropriation of public money for the following year, or any change to an appropriation for the current year, consult with those industry participants who are liable to pay a levy under section 172ZC about that request. "(2) The Commission must, at the time when the request is submitted, report to the Minister on the outcome of that consultation." ----------------------------------------------------------------------- 17 Amendments to Ombudsmen Act 1975 and Public Finance Act 1989 (1) The Ombudsmen Act 1975 is amended by omitting from Part II of the First Schedule the item relating to the Electricity Governance Board, and substituting, in its appropriate alphabetical order, the following item: Electricity Commission and every subsidiary of the Electricity Commission. (2) The Public Finance Act 1989 is amended by omitting from the Fourth, Fifth, and Sixth Schedules the item relating to the Electricity Governance Board, and substituting, in each case in its appropriate alphabetical order, the following item: Electricity Commission. (3) The principal Act is amended by repealing sections 172ZG and 172ZH. 18 New subparts 2 and 3 substituted The principal Act is amended by repealing subpart 2 of Part 15, and substituting the following subparts: "Subpart 2---Accountability of Electricity Commission "172ZJ Interpretation In this subpart, unless the context otherwise requires,--- "GPS objectives and outcomes means the objectives and outcomes that apply to the Commission under section 172ZK "performance standards means the performance targets and measures agreed for the Commission under section 172ZL "report date means the close of 30 June in each calendar year "reporting period means--- "(a) the period beginning on 15 September 2003 and ending on 30 June 2004; and "(b) each subsequent 12-month period ending on 30 June. "172ZK Setting of GPS objectives and outcomes "(1) The Minister must set objectives and outcomes that the Government wants the Commission to {pursue} [give effect to] in relation to the governance of the electricity industry, and against which the Commission must report and be examined in accordance with this subpart. "(2) The Minister must set those objectives and outcomes by--- "(a) giving the Commission a statement of government policy containing those objectives and outcomes {(GPS objectives and outcomes)}; or "(b) giving the Commission an amendment to, or replacement of, that statement. "(3) Each statement (or amendment to, or replacement of, a statement) under subsection (2) must be published in the Gazette and presented to the House of Representatives by the Minister as soon as practicable after it is given to the Commission. New (majority) ----------------------------------------------------------------------- "(4) GPS objectives and outcomes must be consistent with the purpose of this Part and the functions, principal objectives, and specific outcomes of the Commission. "(5) GPS objectives and outcomes must not require the Commission, in respect of a particular person, to make a particular decision, or to do or refrain from doing a particular act, or to bring about a particular result (other than in relation to Transpower). "(6) The Minister must consult with the Commission before giving a statement under this section. ----------------------------------------------------------------------- "172ZL Agreement of annual performance standards "(1) The Commission must, within 3 months after the commencement of each reporting period beginning on or after 1 July 2004, agree performance standards with the Minister for that reporting period. "(2) The performance standards--- "(a) must include the performance targets and other measures by which the performance of the Commission may be judged; and "(b) must be matters against which the Commission's actual performance may be reported and audited; and "(c) must relate to all of the GPS objectives and outcomes. "(3) Before agreeing the performance standards, the Minister must consult with the Auditor-General on whether the proposed performance standards meet the requirements in subsection (2)(b) and (c). "172ZM Annual performance report to Minister "(1) The Commission must, within 3 months after each of the Commission's report dates on and after 30 June 2004, deliver to the Minister a report on its operations during the last reporting period, and submit that annual report to the Auditor-General for an assurance audit under section 172ZO. "(2) The annual report--- "(a) must contain the information that is necessary to enable an informed assessment to be made of the performance of the Commission against the GPS objectives and outcomes and against the performance standards; but "(b) need not contain information on the Commission's financial performance. "172ZN Minister must present annual performance report to House of Representatives The Minister must present copies of every annual report provided to him or her under section 172ZM to the House of Representatives as soon as practicable after receiving that report. "172ZO Assurance audit by Auditor-General "(1) The Auditor-General--- "(a) must examine the annual report provided to the Auditor-General under section 172ZM and report to the Minister and the House of Representatives as soon as practicable after receiving the annual report: "(b) may, at any time, examine the information to be contained in the annual report and the systems of the Commission, and report on that examination to the Minister and the House of Representatives. "(2) The Auditor-General's report under subsection (1) must provide assurance on--- "(a) the appropriateness, adequacy, and accuracy of the information contained, or to be contained, in the annual report; and "(b) whether the annual report enables, or is likely to enable, an informed assessment to be made of the matters stated in section 172ZM(2)(a). "172ZP Report by Parliamentary Commissioner for Environment "(1) The Parliamentary Commissioner for the Environment must examine, in accordance with subsection (2), the extent to which the Commission is meeting the GPS objectives and outcomes concerning the environment. "(2) The Parliamentary Commissioner for the Environment--- "(a) must, as soon as practicable after each report date of the Commission, carry out that examination in respect of the last reporting period and report to the House of Representatives on the results of the examination: "(b) in addition, may carry out the examination {in} [under] subsection (1) and report to the House of Representatives on the results of the examination at any other time. "172ZQ Functions under this subpart "(1) The Parliamentary Commissioner for the Environment may exercise all of the Commissioner's powers under the Environment Act 1986 in relation to the functions in this subpart, and that Act applies to those functions as if they were functions conferred under that Act. "(2) The functions conferred on the Auditor-General and the Parliamentary Commissioner for the Environment by this subpart are additional to, and do not limit, the Auditor-General's or the Commissioner's functions, {duties, and powers} [powers, and duties] under the Public Audit Act 2001 or the Environment Act 1986 (as the case may be). "Subpart 3---Miscellaneous provisions "172ZR Specific authorisation for purposes of restrictive trade practices rules The following are specifically authorised for the purpose of section 43 of the Commerce Act 1986: "(a) anything done or omitted to be done by the {Electricity} Commission for the purpose of carrying out its functions, powers, and duties in relation to reserve energy under this Act; and Struck out (majority) ======================================================================= "(b) anything done, or omitted to be done, that is reasonably necessary to comply with the electricity governance regulations or rules, whether by the Electricity Commission or by an industry participant." ======================================================================= New (majority) ----------------------------------------------------------------------- "(b) anything done, or omitted to be done, by the Commission, the Rulings Panel, or an industry participant, that is reasonably necessary to comply with, enforce, or otherwise administer any electricity governance regulations or rules". ----------------------------------------------------------------------- New (majority) ----------------------------------------------------------------------- 18A Schedule 2A amended (1) Clause 23(2) of Schedule 2A of the principal Act is amended by omitting the expression "7", and substituting the expression "2". (2) Clause 23 of Schedule 2A of the principal Act is amended by adding the following subclause: "(4) Any irregularity regarding the notice of meeting, including the period for calling a meeting, is waived if all members attend the meeting without protest as to the irregularity or if all members agree to the waiver." ----------------------------------------------------------------------- Transitional provision relating to reserve energy Struck out (majority) ======================================================================= 19 Transitional provision relating to reserve energy (1) The Governor-General may, by Order in Council, do either or both of the following: (a) vest in the Commission any assets, rights, or liabilities of the Crown that provide for, or relate to, reserve energy: (b) require the Commission to do anything in respect of any assets, rights, or liabilities of the Crown that provide for, or relate to, reserve energy (including pay money to the Crown to meet or reimburse the Crown's costs (including costs of capital) in relation to those assets, rights, or liabilities). (2) The Order in Council may incorporate by reference any document that sets out the terms and conditions on which the Commission is required to do something under subsection (1)(b) provided the document is publicly available (at all reasonable times) on the Internet. (3) That other document (as it existed on the date of the inclusion but with any additions or variations (if any) as are specified in the Order) forms part of the Order. (4) Any costs incurred by the Commission as a result of the Order must be included in the costs of performing the Commission's functions under the Electricity Act 1992 for the purpose of section 172ZC. (5) No Order may be made under this section later than 3 months after this section comes into force. ======================================================================= New (majority) ----------------------------------------------------------------------- 19 Minister may direct Commission to enter contract relating to Whirinaki power station (1) The Minister may, no later than 3 months after this section comes into force, direct the Commission to enter into a contract providing for the power station located at Whirinaki, and the associated assets, rights, and liabilities, to be available for the purposes of reserve energy. (2) The direction must specify the terms of the contract. (3) The contract entered into under the direction is binding on the parties to it, and is enforceable as if it were a contract that was freely and voluntarily entered into. (4) The contract may be amended or replaced or terminated, but only by mutual consent of the parties. ----------------------------------------------------------------------- New (majority) ----------------------------------------------------------------------- 19A Provisions relating to direction (1) The Minister must consult with the Commission before giving a direction under section 19. (2) The direction must be in writing, signed by the Minister. (3) As soon as practicable after giving the direction, the Minister must--- (a) give notice in the Gazette that the direction has been given; and (b) present a copy of the direction to the House of Representatives. (4) The direction may not be amended, revoked, or replaced. ----------------------------------------------------------------------- New (majority) ----------------------------------------------------------------------- 19B Provisions relating to availability of contract (1) The Commission must--- (a) make the contract that is entered into by the Commission under section 19 available for inspection, during working hours free of charge at the head office of the Commission; and (b) make copies of that contract available for purchase at a reasonable price at the head office of the Commission; and (c) make copies of that contract available free of charge, at all reasonable times, on an Internet website maintained by, or on behalf of, the Commission; and (d) give notice in the Gazette stating that--- (i) the contract has been entered into and the date on which the contract was entered into; and (ii) the contract is available for inspection during working hours free of charge and the place at which it can be inspected; and (iii) copies of the contract can be purchased and the place at which they can be purchased; and (iv) the contract is available on the Internet, free of charge, and the website address. (2) This section also applies to any amendment or replacement of the contract. ----------------------------------------------------------------------- Miscellaneous 20 Electricity Amendment Act 2001 amended Section 19 of the Electricity Amendment Act 2001 is amended by repealing subsections (5) and (6), and substituting the following subsection: Struck out (majority) ======================================================================= "(5) The transitional period ends on the sooner of 31 December 2004 or the date on which Transpower is first authorised or required to use a specified pricing methodology for charging for those services by electricity governance regulations or rules under the principal Act." ======================================================================= New (majority) ----------------------------------------------------------------------- "(5) The transitional period ends on the close of 6 April 2004." ----------------------------------------------------------------------- Part 2 Amendments to Electricity Industry Reform Act 1998 21 Electricity Industry Reform Act 1998 called principal Act In this Part, the Electricity Industry Reform Act 1998 1998 No 88 is called "the principal Act". 22 Purpose of this Part The principal purpose of this Part is to provide new exemptions from the ownership separation rules (but not the corporate separation rules or the arms length rules) in respect of--- (a) generation commissioned after 20 May 2003, if the generating capacity of the generation is no more than the greater of {25} [50] MW and {10%} [20%] of the maximum demand of the lines owned or operated by the person: (b) reserve energy contracted to the Electricity Commission as dry-year reserve. 23 Interpretation (1) Section 3(1) of the principal Act is amended by adding to paragraph (b) of the definition of exempt person the words "or section 46C (exemptions for generation commissioned after 20 May 2003 and for reserve energy)". (2) Section 3(1) of the principal Act is amended by inserting, after the definition of material influence, the following definition: "maximum demand means, in relation to lines, the single highest half-hourly input (in kilowatts), during a particular financial year, to the lines, after allowing for diversity of the demand at each point of input". 24 Meaning of electricity supply business (1) Section 5(2)(e)(i) [of the principal Act] is amended by omitting the words "of the system", and substituting the words "of the lines". New (majority) ----------------------------------------------------------------------- (1A) Section 5 of the principal Act is amended by inserting, after subsection (3), the following subsection: "(3A) Transpower New Zealand Limited, and any subsidiary of or successor to that company, may, without coming within subsection (1), contract with an electricity supply business for that electricity supply business to generate electricity for the purpose of deferring the need for investment by Transpower New Zealand Limited, or any subsidiary of or successor to that company, in the national grid." ----------------------------------------------------------------------- (2) Section 5(4) of the principal Act is amended by repealing the definition of maximum demand. 25 Corporate separation Section 24 of the principal Act is amended by inserting, after the words "new renewable energy source)", the words "or section 46C (exemptions for generation commissioned after 20 May 2003 and for reserve energy)". 26 Arms length rules Section 25(1) of the principal Act is amended by inserting, after the words "new renewable energy source)", the words "or section 46C (exemptions for generation commissioned after 20 May 2003 and for reserve energy)". 27 Purpose of sections (1) Section 27 of the principal Act is amended by omitting the words "sections 28 to 46B", and substituting the words "sections 28 to 46C". New (majority) ----------------------------------------------------------------------- (1A) Section 27 of the principal Act is amended by repealing paragraph (j), and substituting the following paragraph: "(j) a permanent exemption for new distributed generation from a new renewable energy source (section 46A)." ----------------------------------------------------------------------- (2) Section 27 of the principal Act is amended by adding the following paragraph: "(k) permanent exemptions for generation commissioned after 20 May 2003 and reserve energy (section 46C)." New (majority) ----------------------------------------------------------------------- 27A New heading substituted The principal Act is amended by repealing the heading above section 46A, and substituting the following heading:"Exemptions for generation" ----------------------------------------------------------------------- New (majority) ----------------------------------------------------------------------- 27B Exemption for new generation from new renewable energy source Section 46A of the principal Act is amended by omitting the words "distributed" wherever it appears. ----------------------------------------------------------------------- New (majority) ----------------------------------------------------------------------- 27C Section 46B repealed The principal Act is amended by repealing section 46B. ----------------------------------------------------------------------- 28 New [heading and] section 46C {and heading} inserted (1) The principal Act is amended by inserting[, after section 46B,] the following heading and section: "Exemptions for generation commissioned after 20 May 2003 and for reserve energy "46C Exemptions for generation commissioned after 20 May 2003 and for reserve energy "(1) The following activities do not cause any person to breach the ownership separation rules: "(a) generating electricity from generation commissioned on or after 20 May 2003, and selling the electricity generated, if the generating capacity of the generation is no more, at any one time, than the greater of {25} [50] MW (determined according to nameplate or nameplates) or {10%} [20%] of the maximum demand, in the immediately preceding financial year, on the lines owned or operated by the person: "(b) generating reserve energy and selling the electricity generated in accordance with the terms and conditions for that reserve energy set by the Commission, as those terms are defined in the Electricity Act 1992. "(2) Subsection (1) applies only if and as long as sections 24 and 25 (corporate separation and arms length rules) are complied with." Struck out (majority) ======================================================================= (2) The principal Act is amended by repealing the heading above section 46A, and substituting the heading "Exemptions for generation". (3) Section 46A of the principal Act is amended by omitting the word "distributed" in every case where it appears. (4) Section 46B(1) of the principal Act is amended by inserting, after the words "or on section 46A", the words "or on section 46C". ======================================================================= New (majority) ----------------------------------------------------------------------- 28A Section 56A repealed The principal Act is amended by repealing section 56A. ----------------------------------------------------------------------- 29 Other Acts relating to price control not affected Section 92 of the principal Act is amended by inserting, after the words Part IV", the words "and Part 4A". Part 3 Amendments to Commerce Act 1986 30 Commerce Act 1986 called principal Act In this Part, the Commerce Act 1986 1986 No 5 is called "the principal Act". New (majority) ----------------------------------------------------------------------- 30A Interpretation Section 2(1) of the principal Act is amended by inserting, after the definition of document, the following definition: "Electricity Commission means the Commission continued under section 172M of the Electricity Act 1992". ----------------------------------------------------------------------- New (majority) ----------------------------------------------------------------------- 30B New section 57CA inserted The principal Act is amended by inserting, after section 57C, the following section: "57CA Impact of certain decisions made under Gas Act 1992 "(1) This section applies if--- "(a) the Commission is exercising powers under this Part or sections 70 to 72 in relation to the gas industry; and "(b) the industry body is approved or the Energy Commission is established under Part 4A of the Gas Act 1992. "(2) The Commission must take into account, before exercising any of its powers under this Part or sections 70 to 72,--- "(a) any gas governance regulation or rule under Part 4A of the Gas Act 1992, or any decision under those gas governance regulations or rules, that relates to or affects the quality standards or pricing methodologies applicable to a pipeline owner: "(b) the levy payable by any pipeline owner under the Gas Act 1992. "(3) The Commission must, if asked by the Energy Commission to do so, reconsider an existing authorisation or undertaking and, to the extent that the Commission considers it necessary or desirable to do so, vary the authorisation or accept a revised undertaking, to take account of any matter referred to in subsection (2)." ----------------------------------------------------------------------- Struck out (majority) ======================================================================= 31 New section 57DA inserted (1) The principal Act is amended by inserting, after section 57D, the following section: "57DA Body that exercises functions and powers under this Part "(1) If no Order in Council is in force under this section, the Commerce Commission established under this Act is the body that exercises the functions and powers under this Part. "(2) The Governor-General may, at any time after 31 December 2005, by Order in Council made on the recommendation of the Minister of Energy, declare that the Electricity Commission continued under section 172M of the Electricity Act 1992 is the body that exercises the functions and powers under this Part in relation to either Transpower or all large electricity lines businesses. "(3) The Minister of Energy may make the recommendation only if--- "(a) he or she has consulted with representatives of industry participants and representatives of consumers; and "(b) he or she has sought a recommendation from the Electricity Commission and a recommendation from the Commerce Commission and has consulted with those organisations about their recommendations; and "(c) he or she is satisfied that the transfer of functions that would occur would result in--- "(i) more efficient and effective achievement of the purposes of this subpart ; and "(ii) more efficient and effective achievement of the purposes of the Electricity Act 1992 as it applies to some or all large electricity line businesses; and "(iii) lower compliance costs for participants in the electricity distribution and transmission markets. "(4) If an Order in Council is in force under this section,--- "(a) references in this Part and sections 70 to 72 to the Commission or the Commerce Commission must, in so far as they relate to either Transpower or the large electricity lines businesses as declared in the order, be read as references to the Electricity Commission (unless the context otherwise requires); and "(b) the Electricity Commission has, for the purpose of performing its functions and powers under this Part and sections 70 to 72, the powers of the Commerce Commission under sections 86, 87, 88A, 91, 92, 93, 94, 98, 99, and 100; and "(c) despite section 172ZA of the Electricity Act 1992, the Minister of Energy may not direct the Electricity Commission on matters relating to this Part and sections 70 to 72." ======================================================================= New (majority) ----------------------------------------------------------------------- 31 New sections 57DA to 57DF inserted (1) The principal Act is amended by inserting, after section 57D, the following sections: "57DA Body that exercises jurisdiction under this Part "(1) The Commerce Commission established under this Act is the body that exercises jurisdiction under this Part in respect of a large electricity lines business unless an Order in Council is in force under section 57DB or section 57DC in respect of that business. "(2) Jurisdiction under this Part, in this section and sections 57DB to 57DF, includes all of the functions, powers, and duties of the Commerce Commission under this Part and sections 70 to 72. "57DB Transfer of jurisdiction in respect of Transpower "(1) The Governor-General may, by Order in Council made on the recommendation of the Minister of Energy, at any time, transfer to the Electricity Commission the jurisdiction under this Part in respect of Transpower. "(2) Section 57DD applies before an order can be made. "57DC Transfer of jurisdiction relating to other large electricity lines businesses "(1) The Governor-General may, by Order in Council made on the recommendation of the Minister of Energy, transfer to the Electricity Commission the jurisdiction under this Part in respect of all other large electricity lines businesses. "(2) The order may be made no earlier than 30 September 2007. "(3) The order may transfer different parts of that jurisdiction on different dates, provided that the transfer of the jurisdiction to administer thresholds, and to make and enforce declarations of control, may not take effect before the later of--- "(a) 18 months after the order is made; or "(b) 1 April 2009. "(4) The order may also specify the extent to which, or the purposes for which, references in sections 86, 87, 88, 88A, 91, 92, 93, 94, 98, 99, and 100, to the Commission or the Commerce Commission apply to the Electricity Commission, in so far as they relate to any business to which the order applies. "(5) Section 57DD applies before an order can be made. "57DD Procedure before jurisdiction order can be made "(1) The Minister of Energy may make a recommendation for the purpose of section 57DB or section 57DC only if--- "(a) he or she has consulted with representatives of industry participants and representatives of consumers; and "(b) he or she has consulted with the Electricity Commission and the Commerce Commission and has sought a recommendation from them; and "(c) he or she is satisfied that the transfer of jurisdiction that would occur would result in--- "(i) more efficient and effective achievement of the purposes of this Part; and "(ii) more efficient and effective achievement of the purposes of the Electricity Act 1992 as it applies to some or all large electricity line businesses; and "(iii) lower compliance costs for industry participants in the electricity distribution and transmission markets. "(2) Industry participant has the same meaning as in the Electricity Act 1992. "57DE Levies during transition in jurisdiction "(1) The costs of the Commerce Commission during any period after an order is made to transfer jurisdiction under this Part may continue to be met via levy regulations under section 57ZK or section 74. "(2) The costs of the Electricity Commission in respect of jurisdiction that is transferred to it must be met via levy regulations under the Electricity Act 1992. "57DF Ministerial powers The Minister of Energy may not set objectives and outcomes under section 172ZK of the Electricity Act 1992 that amount to a direction to the Electricity Commission on matters relating to its jurisdiction under this Part." ----------------------------------------------------------------------- Struck out (majority) ======================================================================= 32 Thresholds for declaration of control Section 57G of the principal Act is amended by adding the following subsections: "(3) The Commission may incorporate by reference in a threshold any document that is publicly available (at all reasonable times) on the Internet. "(4) That other document (as it existed on the date of the inclusion but with any additions or variations (if any) as are specified in the threshold published in the Gazette) forms part of the threshold." ======================================================================= New (majority) ----------------------------------------------------------------------- 32 New sections 57GA to 57GG inserted The principal Act is amended by inserting after section 57G, the following sections: "57GA Incorporation by reference of material in thresholds "(1) The Commission may incorporate by reference in a threshold any written material that deals with technical matters and is too large or impractical to include in, or print as part of, the threshold. "(2) Material may be incorporated by reference in a threshold--- "(a) in whole or in part; and "(b) with modifications, additions, or variations specified in the threshold. "(3) Material incorporated by reference in a threshold has legal effect as part of the threshold. "57GB Effect of amendments to, or replacement of, material incorporated by reference in thresholds An amendment to, or replacement of, material incorporated by reference in a threshold (threshold A) has legal effect as part of threshold A only if a threshold made under section 57G after the making of threshold A states that the particular amendment or replacement has that effect. "57GC Amendments to, or replacement of, material incorporated by reference to be of same general character as original material A threshold may not be made under section 57G that states that an amendment to, or replacement of, material incorporated by reference has effect as part of threshold A unless the amendment or replacement material is of the same general character as the material amended or replaced. "57GD Proof of material incorporated by reference "(1) A copy of material incorporated by reference in a threshold, including any amendment to, or replacement of, the material, (material) must be--- "(a) certified as a correct copy of the material by the Chairman; and "(b) retained by the Chairman. "(2) The production in proceedings of a certified copy of the material is, in the absence of evidence to the contrary, sufficient evidence of the incorporation in the threshold of the material. "57GE Effect of expiry of material incorporated by reference Material incorporated by reference in a threshold that expires or that is revoked or that ceases to have effect ceases to have legal effect as part of the threshold only if a threshold made under section 57G states that the material ceases to have legal effect. "57GF Requirement to consult "(1) This section applies to--- "(a) a threshold under section 57G that incorporates material by reference: "(b) a threshold under section 57G that states that an amendment to, or replacement of, material incorporated by reference in a threshold has legal effect as part of the threshold. "(2) Before a threshold to which this section applies is made, the Chairman must--- "(a) make copies of the material proposed to be incorporated by reference or the proposed amendment to, or replacement of, material incorporated by reference (proposed material) available for inspection during working hours for a reasonable period, free of charge, at the head office of the Commission; and "(b) make copies of the proposed material available for purchase at a reasonable price at the head office of the Commission; and "(c) make copies of the proposed material available free of charge on an Internet website maintained by, or on behalf of, the Commission; and "(d) give notice in the Gazette stating that--- "(i) the proposed material is available for inspection during working hours free of charge, the place at which it can be inspected, and the period during which it can be inspected; and "(ii) copies of the proposed material can be purchased and the place at which they can be purchased; and "(e) allow a reasonable opportunity for persons to comment on the proposal to incorporate the proposed material by reference; and "(f) consider any comments they make. "(3) The reference in subsection (1) to the proposed material includes, if the material is not in an official New Zealand language, an accurate translation in an official New Zealand language of the material. "(4) A failure to comply with this section does not invalidate regulations that incorporate material by reference. "57GG Access to material incorporated by reference "(1) The Chairman must--- "(a) make the material referred to in subsection (2) (material) available for inspection during working hours for a reasonable period, free of charge at the head office of the Commission; and "(b) make copies of the material available for purchase at a reasonable price at the head office of the Commission; and "(c) make copies of the material available on an Internet website maintained by, or on behalf of, the Commission; and "(d) give notice in the Gazette stating that--- "(i) the material is incorporated in the threshold and the date on which the threshold was made; and "(ii) the material is available for inspection during working hours free of charge and the place at which it can be inspected; and "(iii) copies of the material can be purchased and the place at which they can be purchased; and "(iv) the material is available on the Internet, free of charge, and the website address. "(2) The material is--- "(a) material incorporated by reference in a threshold under section 57GA: "(b) any amendment to, or replacement of, that material that is incorporated in the threshold or the material referred to in paragraph (a) with the amendments or replacement material incorporated: "(c) if the material referred to in paragraph (a) or paragraph (b) is not in an official New Zealand language, as well as the material itself, an accurate translation in an official New Zealand language of the material. "(3) A failure to comply with this section does not invalidate regulations that incorporate material by reference." ----------------------------------------------------------------------- 33 Priorities Section 57K(1) of the principal Act is amended by--- (a) omitting from paragraph (b) the word "; or"; and (b) repealing paragraph (c). 34 Authorisations and undertakings Section 57M of the principal Act is amended by adding, as subsection (2), the following subsection: "(2) The Commission may not make an authorisation, or accept an undertaking, in respect of all or any component of the quality standards of Transpower." 35 New section 57MA inserted The principal Act is amended by inserting, after section 57M, the following section: "57MA Impact of certain decisions made under Electricity Act 1992 "(1) The Electricity Commission {continued under section 172M of the Electricity Act 1992} must advise the Commerce Commission as soon as practicable after making any recommendation for an electricity governance regulation or rule under subpart 2 of Part XIV of the Electricity Act 1992 [, or after making any decision under electricity governance regulations or rules,] that is likely to affect the powers of the Commerce Commission under this Part or sections 70 to 72. "(2) The Commission must take into account, before exercising any of its powers under this Part or sections 70 to 72,--- "(a) any electricity governance regulation or rule[, or decision made under them,] that relates to or affects the quality standards or pricing methodologies applicable to Transpower: "(b) any electricity governance regulation or rule[, or decision made under them,] that relates to or affects the pricing methodologies applicable to any other line owner: "(c) the levy payable by Transpower or any other line owner under section 172ZC of the Electricity Act 1992. "(3) The Commission must, if asked by the Electricity Commission to do so, reconsider an existing authorisation or undertaking and, to the extent that the Commission considers it necessary or desirable to do so, vary the authorisation or accept a revised undertaking, to take account of any matter referred to in subsection (2)." 36 Subpart [2] repealed (1) Part 4A of the principal Act is amended by repealing subpart 2. (2) Section 91(1)(a) of the principal Act is [consequentially] amended by repealing subparagraph (iii). New (majority) ----------------------------------------------------------------------- (3) Section 91(1)(b) of the principal Act is consequentially amended by repealing subparagraph (ii). ----------------------------------------------------------------------- 37 Sections relating to recalibration of asset values of large electricity line owners repealed (1) The principal Act is amended by repealing sections 57X to 57ZC, and the heading above section 57X. (2) Section 57ZJ(1) of the principal Act is [consequentially] amended by--- (a) omitting from paragraph (b) the word "; or"; and (b) repealing paragraphs (c) and (d). New (majority) ----------------------------------------------------------------------- (2A) Section 57ZJ(2) is consequentially amended by omitting the words "or subsection (1)(d)". (2B) Section 57ZJ(3) is consequentially amended by omitting the words "or subsection (1)(c)". ----------------------------------------------------------------------- (3) Section 91(1)(a) of the principal Act is [consequentially] amended by repealing subparagraph (iv). Struck out (majority) ======================================================================= 38 New section 57CA inserted The principal Act is amended by inserting, after section 57C, the following section: "57CA Impact of certain decisions made under Gas Act 1992 "(1) This section applies if--- "(a) the Commission is exercising powers under Part IV or sections 70 to 72 in relation to the gas industry; and "(b) the Energy Commission is established and makes any recommendation for a gas governance regulation or rule under Part 4A of the Gas Act 1992 that is likely to affect the exercise of those powers. "(2) The Commission must take into account, before exercising any of its powers under Part IV or sections 70 to 72,--- "(a) any gas governance regulation or rule that relates to or affects the quality standards or pricing methodologies applicable to a pipeline owner: "(b) the levy payable by any pipeline owner under section 43V of the Gas Act 1992. "(3) The Commission must, if asked by the Energy Commission to do so, reconsider an existing authorisation or undertaking and, to the extent that the Commission considers it necessary or desirable to do so, vary the authorisation or accept a revised undertaking, to take account of any matter referred to in subsection (2)." ======================================================================= 39 Consequential amendments to Ministry of Energy (Abolition) Act 1989 (1) The heading to section 13 of the Ministry of Energy (Abolition) Act 1989 is amended by omitting the word "prices", and substituting the words "goods or services". (2) Section 13(1) of the Ministry of Energy (Abolition) Act 1989 is amended by omitting the words "the prices of". Part 4 Amendments to Gas Act 1992 40 Gas Act 1992 called principal Act In this Part, the Gas Act 1992 1992 No 124 is called "the principal Act". Commencement [of Energy Commission provisions] 41 Process to apply before Energy Commission provisions may be commenced (1) The Minister of Energy may recommend the making of the Order in Council under section 2(3) only if--- (a) the Minister has publicly notified his or her intention to do so by publishing in the Gazette a notice--- (i) stating that the Minister is proposing to recommend that the Order in Council be made, when the Minister proposes that the Order in Council will come into force, and that the effect of the Order in Council will be to establish the Energy Commission under the Gas Act 1992; and (ii) stating the reason or reasons that the Minister proposes recommending the making of the Order in Council or stating where copies of that statement may be obtained; and (iii) inviting members of the public to make submissions on the proposal; and (iv) stating the last date on which the Minister will receive submissions on the proposal (which date must be no less than 28 days after the date of the notice's publication); and (b) the Minister has considered all submissions on the proposal that are received by him or her on or before the date stated under paragraph (a)(iv); and (c) at least 3 months have expired since the date of the notice's publication; and (d) No more than 6 months have expired since the date of the notice's publication or, if the Minister renews the period by notice in the Gazette before the end of that 6 months, no more than 12 months have expired since the date of the notice's publication. (2) If the Minister of Energy commences a notice and submission process under subsection (1) but subsequently decides not to recommend the making of an Order in Council, he or she must publish a further notice in the Gazette stating that decision and terminating the notice and submission process, as soon as practicable after making that decision. (3) Subsection (1) does not apply if the Minister considers that it is necessary or desirable in the public interest that the Order in Council be made urgently. (4) The Minister may carry out more than 1 notice and submission process under subsection (1), and those processes may be carried out concurrently or consecutively. Struck out (majority) ======================================================================= Purpose 42 Purpose The principal purpose of this Part is to provide gas governance regulation-making and rule-making powers, and to provide for a Crown entity to regulate the gas industry, if the gas industry does not meet the Government's objectives for the gas sector through self-regulation. ======================================================================= Amendments to principal Act 43 Title amended The Title of the principal Act is amended by inserting, after the words "of gas", the words "and the gas industry". Struck out (majority) ======================================================================= 44 Interpretation (1) Section 2 of the principal Act is amended by inserting, in their appropriate alphabetical order, the following definitions: "Commission means the Energy Commission to be established under section 43M "domestic consumer means any person who purchases or uses gas in respect of any dwellinghouse "gas governance regulations means regulations made under sections 43C to 43F "gas producer means a person who supplies gas that is transmitted on gas transmission or distribution pipelines "industry participant means--- "(a) a gas retailer: "(b) a gas distributor: "(c) a gas producer: "(d) a pipeline owner: "(e) a gas wholesaler: "(f) a person who purchases gas directly from a gas producer or gas wholesaler or any wholesale gas market: "(g) any person involved in the governance or administration of the gas industry: "rules and gas governance rules mean, for the purpose of Part 4A, rules made under section 43H." ======================================================================= 45 New Part 4A inserted The principal Act is amended by inserting, after {Part IV} [section 43], the following Part: "Part 4A "Governance of Gas Industry "Subpart 1---General and regulation-making powers "Preliminary provisions New (majority) ----------------------------------------------------------------------- "43AA Purpose The purpose of this Part is to provide for the governance of the gas industry. "43AAB Outline of Part "(1) Subpart 1 principally contains regulation-making powers that can be used for the governance of the gas industry. "(2) Subpart 1A enables co-regulation of the gas industry by the Government and an industry body. "(3) Subpart 2 enables regulation of the gas industry by the Government and a Crown entity called the Energy Commission. "(4) Subpart 1A expires if subpart 2 is brought into force by Order in Council. "(5) Subpart 3 contains exemptions from the restrictive trade practice provisions of the Commerce Act 1986. "(6) This section is intended only as a guide to the general scheme and effect of this Part. ----------------------------------------------------------------------- Struck out (majority) ======================================================================= "43A Outline of subpart "(1) In this subpart, the principal regulation-making powers are as follows: "(a) gas governance regulations and rules may be made under section 43C about the wholesale market, gas processing facilities, transmission, and distribution of gas: "(b) under section 43D, these gas governance regulations and rules about the wholesale market, gas processing facilities, transmission, and distribution of gas matters may be made only if the Energy Commission is established (and then either for transitional purposes or to implement the substantive effect of a recommendation by the Energy Commission) and in accordance with the process in that section: "(c) other gas governance regulations and rules may be made under sections 43E and 43F: "(d) under section 43G, these other gas governance regulations and rules may be made whether or not the Energy Commission is established or has made a recommendation, but only in accordance with the process in that section. "(2) This section is intended only as a guide to the general scheme and effect of the principal regulation-making powers in this Part. ======================================================================= New (majority) ----------------------------------------------------------------------- "43A Outline of regulation-making powers "(1) In this subpart, the principal regulation-making powers are as follows: Type of regulations How they can be made Regulations for terms and They can be made at any conditions of access to time, (whether or not Maui pipeline the industry body has Regulations on retail and consumer issues been approved, or the Commission is established, or has made a recommendation). Regulations on wholesale They can be made only if--- market (a) an industry body is approved Regulations on gas (and then only to implement the processing facilities effect of a recommendation by Regulations on transmission, that body); or and distribution of gas (b) the Commission is established (other than on terms and (and then only for transitional conditions of access to purposes or to implement the Maui pipeline effect of a recommendation by the Commission). "(2) This section is intended only as a guide to the general scheme and effect of the principal regulation-making powers in this Part. "43AB Interpretation "(1) In this Part, unless the context otherwise requires,--- "board, in relation to the industry body, means the directors, trustees, or other persons who constitute the governing board of the industry body "Commission means the Energy Commission to be established under section 43M "constitution, in relation to the industry body, means its constitution or trust deed or other similar governing document "domestic consumer means any person who purchases gas in respect of any dwellinghouse "gas governance regulations means regulations made under sections 43C to 43K "gas producer means a person who supplies gas that is transmitted on gas transmission or distribution pipelines "GPS objectives and outcomes means objectives and outcomes set under section 43KS "industry body means the body approved by Order in Council under section 43KP "industry participant means--- "(a) a gas retailer: "(b) a gas distributor: "(c) a gas producer: "(d) a pipeline owner: "(e) a gas wholesaler: "(f) a person who purchases gas directly from a gas producer or gas wholesaler or on any wholesale gas market: "(g) a service provider appointed under any gas governance regulations: "(h) a metering equipment owner: "(i) a data administrator,--- but does not include the industry body or the Commission (even to the extent that the industry body or the Commission may be acting as a service provider after an appointment under gas governance regulations) "member,--- "(a) in relation to the board of the industry body, means a director or trustee or other person occupying a similar position by whatever name called; and "(b) in relation to the industry body itself, means a shareholder or beneficiary or other person occupying a similar position by whatever name called "publicise, in relation to a document, means,--- "(a) to make the document available to the public, at no cost, on a website maintained by or on behalf of the Commission, at all reasonable times; and "(b) to give notice of the document in the Gazette "recommending body, in relation to a recommendation for gas governance regulations or rules, means the industry body, the Commission, or the Minister who makes the recommendation "rules and gas governance rules mean rules made under section 43H "Rulings Panel means any Rulings Panel established under gas governance regulations "small consumer means a consumer who is supplied with less than 10 terajoules of gas per year. ----------------------------------------------------------------------- "Complaints resolution system "43B Complaints resolution system Struck out (majority) ======================================================================= "(1) Every gas distributor and every gas retailer must participate in a complaints resolution system that is approved by the Commission for the purpose of addressing complaints by any person (including potential consumers and landowners) relating to gas retailers and gas distributors. ======================================================================= New (majority) ----------------------------------------------------------------------- "(1) Every gas distributor and every gas retailer must participate in a complaints resolution system that is approved by the Minister for the purpose of addressing complaints relating to gas retailers and gas distributors by all or any of--- "(a) small consumers (including potential small consumers): "(b) owners and occupiers of land into, through, or against which pipelines have been laid down or placed. ----------------------------------------------------------------------- "(2) This section applies {at all times on and after the date on which this section comes into force,} provided the {Commission} [Minister] has approved 1 or more complaints resolution systems [by notice in the Gazette]. "Gas industry regulation-making powers "43C Gas governance regulations for wholesale market, processing facilities, transmission, and distribution of gas "(1) The Governor-General may, by Order in Council made on the recommendation of the Minister in accordance with {section 43D} [sections 43G to 43GG], make regulations for all or any of the purposes in subsection (2). "(2) The purposes are--- "Wholesale gas market "(a) providing for the establishment and operation of wholesale markets for gas, including for--- "(i) protocols and standards for reconciling and balancing gas: "(ii) clearing, settling, and reconciling market transactions: "(iii) the provision and disclosure of data and other market information: "(iv) minimum prudential standards of market participation: "(v) minimum standards of market conduct: "(vi) arrangements relating to outages and other security of supply contingencies: "Processing facilities "(b) setting reasonable terms and conditions for access to, and use of, gas processing facilities where--- "(i) this is reasonably necessary to allow new fields to be developed; and "(ii) spare capacity is available or could be made available if the person accessing or using the facilities paid the reasonable costs (including the costs of capital) of providing the additional capacity: "Transmission and distribution of gas "(c) prescribing reasonable terms and conditions for access to transmission {and} [or] distribution pipelines: "(d) requiring expansions, upgrades, or service quality improvements to gas transmission pipelines including specifying how these will be paid for. Struck out (majority) ======================================================================= "43D Conditions and process for recommendations on gas governance regulations for wholesale market, gas processing facilities, transmission, and distribution of gas "(1) The Minister may recommend gas governance regulations under section 43C only if--- "(a) the Energy Commission is established; and "(b) the recommendation--- "(i) is for transitional purposes if the Energy Commission is established but has not yet made a recommendation to the Minister on the matter; or "(ii) implements the substantive effect of a recommendation by the Energy Commission to the Minister. "(2) The following process applies to recommendations by the Minister and the Energy Commission concerning those regulations: "(a) sections 43S to 43U apply in relation to the Energy Commission's recommendation: "(b) before making a recommendation, the Energy Commission or, if there is no Energy Commission recommendation, the Minister must consult with persons that the Energy Commission or the Minister (as the case may be) thinks are representative of the interests of persons likely to be substantially affected by the proposed regulations: "(c) the Commission and the Minister must each, before making a recommendation, have regard to the principal objective and specific outcomes in sections 43O and 43P: "(d) the Energy Commission must advise the Commerce Commission as soon as practicable after making any recommendation for a gas governance regulation or rule that is likely to affect the powers of the Commerce Commission under Part IV or sections 70 to 72 of the Commerce Act 1986. "(3) Subsection (2)(b) does not apply if the Energy Commission or the Minister (as the case may be) considers that it is necessary or desirable in the public interest that the proposed regulations be made urgently and, in this case, the recommendation must state that it is made in reliance on this subsection and then, within 6 months of those regulations being made,--- "(a) the Energy Commission or the Minister must consult on the regulations in accordance with subsection (2)(b); and "(b) after that consultation, the Minister must publish a notice in the Gazette stating whether or not he or she decides to recommend the revocation, replacement, or amendment of the regulations and explaining the reasons for that decision, or stating where copies of that explanation may be obtained,--- and then within a further 6 months, the Minister must make that recommendation. "(4) A regulation that is found by a court to be invalid solely because of a contravention of subsection (2)(b) may not be declared to be invalid with effect earlier than 6 months after the date of the declaration. ======================================================================= "43E Other gas governance regulations "(1) The Governor-General may, by Order in Council made on the recommendation of the Minister in accordance with {section 43G} [sections 43G to 43GG], make regulations for all or any of the purposes in subsection (2). "(2) The purposes are--- "Complaints resolution system Struck out (majority) ======================================================================= "(a) providing for the establishment of, and participation by gas distributors and gas retailers in, a complaints resolution system (that may include codes of practice) for the purpose of addressing complaints by any person (including potential consumers and landowners) relating to gas retailers and gas distributors, and setting out minimum requirements in relation to those systems, including provision for awards of compensation up to a maximum of $20,000 and for appeals: ======================================================================= New (majority) ----------------------------------------------------------------------- "(a) providing for the establishment of, or participation by gas distributors and gas retailers in, a complaints resolution system (that may include codes of practice) for the purpose of addressing complaints by all or any of small consumers (including potential small consumers), or owners and occupiers of land into, through, or against which pipelines have been laid down or placed, relating to gas retailers and gas distributors, or setting out minimum requirements in relation to that system, including--- "(i) provision for compensation up to a maximum of $20,000 to be awarded, and other actions to be taken, by the complaints resolution agency in relation to those complaints: "(ii) provision for rights of review, or rights of appeal on a question of law only, in relation to decisions relating to those complaints: ----------------------------------------------------------------------- "Prepayment meters "(b) requiring gas retailers to offer prepayment meters to domestic consumers at a reasonable cost, and prescribing conditions on which those meters must be {supplied} [offered], with the objective of ensuring that all domestic consumers who wish to pay for gas in advance have the option to do so at reasonable cost: "Ability of consumers to choose preferred gas retailer "(c) requiring all gas retailers to comply with, and give effect to, a system or set of rules that will enable any consumer or class of consumer to choose, and alternate, between competing gas retailers, with the objective of promoting competition in gas retail markets: "Transition arrangements for insolvent gas retailers "(d) providing a system of transition arrangements for consumers in the event of a gas retailer becoming insolvent, and requiring industry participants to comply with that system, with the objective of protecting consumers or managing the liabilities of other gas retailers: "Disclosure of information "(e) providing for the disclosure of information by gas transmitters, distributors, and retailers on tariff and other charges: "Terms and conditions of access "(f) providing for terms and conditions of access to gas meters by gas retailers: "Information on customer accounts "(g) providing for information on customer accounts: "Consumer contracts "(h) providing for minimum terms and conditions in contracts between domestic consumers and gas distributors or gas retailers: "Dispute resolution procedures "(i) providing procedures for resolving disputes between industry participants: "(j) providing for the operation and facilitation of those dispute resolution procedures by a person, and the powers and procedures of that person: "Enforcement of gas governance regulations "(k) providing for compliance with gas governance regulations and rules to be monitored and enforced by the [industry body or the] Commission or any other person or court, and the powers and procedure of that person or court: "Process "(l) providing for processes for settling particular issues within the gas industry that may result in recommendations for gas governance regulations or rules, and requiring compliance by industry participants[, the industry body,] and the Commission with those processes, including compliance with requirements to produce documents as part of those processes. "43F Low fixed charge tariff option for domestic consumers "(1) The objective of this section is to enable the making of regulations to ensure that gas providers offer a low fixed charge tariff option or options for delivered gas to domestic consumers that will assist low-use consumers and encourage energy conservation. "(2) In this section,--- "delivered gas includes components like gas supply, line function services, customer service, meter provision, and meter reading services "fixed charge means a charge levied for each customer connection in currency per time period (for example, cents per day) "gas provider means a gas retailer or other business that contracts with consumers to sell delivered gas or a component of delivered gas. "(3) The Governor-General may, by Order in Council made on the recommendation of the Minister in accordance with {section 43G} [sections 43G to 43GG], make regulations [for all or any of the following purposes:] "(a) requiring gas providers to make available to domestic consumers 1 or more tariff options that include a fixed charge for delivered gas to dwellinghouses at not more than a specified amount {or proportion calculated by reference to the total charge of the average or median domestic consumer}: "(b) regulating the variable (cents per kilowatt hour) charges in those required tariff options to ensure that {average or median} [low-use] domestic consumers would pay {no more} [a lower total charge] on the required tariff option than on any [similar] alternative [tariff] option available from that gas provider: "(c) regulating other charges and other terms and conditions of the contracts to which the low fixed charge tariff options in paragraph (a) relate, to ensure that they are not, in the opinion of the Minister, unreasonably detrimental to the interests of low-use consumers: "(d) setting rules as to the offering, supply, advertisement, promotion, availability, and unbundling of regulated charging options: "(e) specifying criteria for the Minister to exempt gas providers, or gas providers in relation to particular areas, from the application of the regulations if, in the opinion of the Minister, the gas providers materially comply with the objective of this section. New (majority) ----------------------------------------------------------------------- "(3A) No gas provider that is a customer trust or a community trust may pay a domestic consumer who is on the required tariff option a different rebate only because the consumer is on the required tariff option. "(3B) Each trustee of a gas provider that contravenes subsection (3A) commits an offence, and is liable on summary conviction to a fine not exceeding $20,000. ----------------------------------------------------------------------- "(4) If the components that make up the delivered gas are unbundled, regulations may be made under subsection (3) for each component, or group of components, of delivered gas to ensure that the objective of this section is achieved for the aggregate of all the components. "(5) Subsection (4) applies regardless of whether different components of delivered gas are supplied by the same gas provider. "(6) Regulations made under subsection (3) may provide for the way in which the total charge of the {average or median} [low-use] domestic consumer is to be assessed, which may be (without limitation) calculated with reference to national data or the data relating to any gas retailer or gas distributor. "(7) The Governor-General may, for the purpose of assisting retailers to deliver low fixed charge tariff options, by Order in Council made on the recommendation of the Minister in accordance with {section 43G} [sections 43G to 43GG], make regulations [for all or any of the following purposes]: "(a) regulating all or any charges charged by gas distributors to ensure that they are not, in the opinion of the Minister, unreasonably detrimental to the interests of low-use consumers: "(b) regulating the terms and conditions under which gas distributors supply their services in relation to domestic consumers to ensure that they are not, in the opinion of the Minister, unreasonably detrimental to the interests of low-use consumers: "(c) setting rules as to the offering, availability, supply, and unbundling of gas distributors' services: New (majority) ----------------------------------------------------------------------- "(d) regulating the charging, offering, supply, and availability of delivered gas by other gas providers. ----------------------------------------------------------------------- "(8) The Governor-General may, by Order in Council made on the recommendation of the Minister in accordance with section 43G, make regulations providing for the supply and collection of information from gas providers and gas distributors--- "(a) about contracts, offers, advertising, or promotion relating to the supply of delivered gas, or components of delivered gas, to domestic consumers; or "(b) information that is necessary for the purposes of calculating the total charge for the {average or median} [low-use] domestic consumer. New (majority) ----------------------------------------------------------------------- "Process for making recommendations on gas governance regulations ----------------------------------------------------------------------- Struck out (majority) ======================================================================= "43G Process for recommendations on other gas governance regulations "(1) The Minister may recommend gas governance regulations under section 43E or section 43F if the Energy Commission is not established. "(2) If the Energy Commission is established, the Minister may recommendgas governance regulations under section 43E or section 43F only if the recommendation--- "(a) is for transitional purposes if the Energy Commission has not yet made a recommendation to the Minister on the matter; or "(b) implements the substantive effect of a recommendation by the Energy Commission to the Minister. "(3) The following process applies to recommendations by the Minister and the Energy Commission concerning those regulations: "(a) sections 43S to 43U apply in relation to the Energy Commission's recommendation: "(b) before making a recommendation, the Energy Commission must consult with persons that the Energy Commission thinks are representative of the interests of persons likely to be substantially affected by the proposed regulations: "(c) if there is no Energy Commission recommendation, the Minister must, before making a recommendation, consult with persons that the Minister thinks are representative of the interests of persons likely to be substantially affected by the proposed regulations: "(d) before making a recommendation concerning regulations under section 43E(2)(a) to (h) or section 43F, the Minister must consult with the Minister of Consumer Affairs: "(e) the Energy Commission and the Minister must each, before making a recommendation, have regard to the principal objective and specific outcomes contained in sections 43O and 43P: "(f) if the Energy Commission has made a recommendation to the Minister on the matter, the Minister must have regard to the Commission's recommendation before making his or her own recommendation: "(g) the Energy Commission must advise the Commerce Commission as soon as practicable after making any recommendation for a gas governance regulation or rule that is likely to affect the powers of the Commerce Commission under Part IV or sections 70 to 72 of the Commerce Act 1986. "(4) Subsection (3)(b), (c), and (d) does not apply if the Energy Commission or the Minister (as the case may be) considers that it is necessary or desirable in the public interest that the proposed regulations be made urgently and, in this case, the recommendation must state that it is made in reliance on this subsection and then, within 6 months of those regulations being made,--- "(a) the Minister must consult on the regulations in accordance with subsection (3)(c); and "(b) after that consultation, the Minister must publish a notice in the Gazette stating whether or not he or she decides to recommend the revocation, replacement, or amendment of the regulations and explaining the reasons for that decision, or stating where copies of that explanation may be obtained,--- and then, within a further 6 months, the Minister must make that recommendation. "(5) A regulation that is found by a court to be invalid solely because of a contravention of subsection (3)(b) may not be declared to be invalid with effect earlier than 6 months after the date of the declaration. ======================================================================= New (majority) ----------------------------------------------------------------------- "43G Which gas governance regulations can be made if there is no industry body or Commission If there is no industry body and no Commission, the Minister may recommend only--- "(a) regulations prescribing terms and conditions for access to the Maui pipeline under section 43C(2)(c): "(b) regulations under section 43E, section 43F, section 43J, or section 43K. ----------------------------------------------------------------------- New (majority) ----------------------------------------------------------------------- "43GA Which gas governance regulations can be made if there is industry body but no Commission "(1) If there is an industry body but no Commission, the Minister may recommend only--- "(a) regulations prescribing terms and conditions for access to the Maui pipeline under section 43C(2)(c): "(b) other gas governance regulations under section 43C but only if the recommendation--- "(i) implements the effect of a recommendation of the industry body; and "(ii) does not differ from that recommendation in any material way (for example, other than in matters of drafting style or minor detail): "(c) regulations under section 43E, section 43F, section 43J, or section 43K. "(2) If there is an industry body but no Commission, the Minister must not recommend gas governance regulations under paragraph (a) or paragraph (c) or paragraph (h) of section 43E(2) unless the industry body has been given a reasonable opportunity to recommend gas governance regulations under those paragraphs. ----------------------------------------------------------------------- New (majority) ----------------------------------------------------------------------- "43GB Which gas governance regulations can be made if there is Commission If there is a Commission, the Minister may recommend any gas governance regulations but only if--- "(a) the recommendation is for transitional purposes if the Commission has not yet made a recommendation to the Minister on the matter; or "(b) the recommendation--- "(i) implements the effect of a recommendation of the Commission; and "(ii) does not differ from that recommendation in any material way (for example, other than in matters of drafting style or minor detail). ----------------------------------------------------------------------- New (majority) ----------------------------------------------------------------------- "43GC Consultation before making recommendation on gas governance regulations "(1) Before making a recommendation on any gas governance regulations, the recommending body must consult with persons that the recommending body thinks are representative of the interests of persons likely to be substantially affected by the proposed regulations. "(2) However, subsection (1) does not apply to the Minister if the Minister's recommendation--- "(a) implements the effect of a recommendation of the industry body or the Commission; and "(b) does not differ from that recommendation in any material way (for example, other than in matters of drafting style or minor detail). "(3) Before making a recommendation concerning regulations under section 43E(2)(a) to (h) or section 43F, the Minister must consult with the Minister of Consumer Affairs. "(4) This section is subject to section 43GG in the case of urgent regulations. "(5) A regulation that is found by a court to be invalid solely because of a contravention of this section may not be declared to be invalid with effect earlier than 6 months after the date of the declaration. ----------------------------------------------------------------------- New (majority) ----------------------------------------------------------------------- "43GD Other process for making recommendations for gas governance regulations The following also applies to the making of recommendations for gas governance regulations: "(a) sections 43KR to 43KT apply to a recommendation of the industry body: "(b) sections 43T and 43U apply to a recommendation of the Commission: "(c) the industry body or the Commission must undertake an assessment under section 43GE before making a recommendation: "(d) the Minister must, before making a recommendation on gas governance regulations for which a recommendation of the industry body is not required under section 43GA, have regard to any recommendation that the industry body may have made about those regulations. ----------------------------------------------------------------------- New (majority) ----------------------------------------------------------------------- "43GE Assessment of proposed gas governance regulations "(1) Before making a recommendation to the Minister on a gas governance regulation, the industry body or the Commission must--- "(a) seek to identify all reasonably practicable options for achieving the objective of the regulation; and "(b) assess those options by considering--- "(i) the benefits and costs of each option; and "(ii) the extent to which the objective would be promoted or achieved by each option; and "(iii) any other matters that the industry body or the Commission considers relevant; and "(c) ensure that the objective of the regulation is unlikely to be satisfactorily achieved by any reasonably practicable means other than the making of the regulation (for example, by education, information, or voluntary compliance); and "(d) give a statement of the proposal to the persons, or representatives of those persons, that the industry body or the Commission considers will be substantially affected by the regulation; and "(e) consult with those persons and give them the opportunity to make submissions; and "(f) consider those submissions. "(2) The statement of the proposal referred to in subsection (1)(d) must contain--- "(a) a detailed statement of the proposal; and "(b) a statement of the reasons for the proposal; and "(c) an assessment of the reasonably practicable options, including the proposal, identified under subsection (1); and "(d) other information that the industry body or the Commission considers relevant. "(3) The industry body or the Commission is not required to comply with subsection (1) if it is satisfied that--- "(a) a recommendation needs to be made urgently in relation to the regulation; or "(b) the effect of the recommendation is minor and will not adversely affect the interests of any person in a substantial way. ----------------------------------------------------------------------- New (majority) ----------------------------------------------------------------------- "43GF Process after making recommendation for gas governance regulation "(1) The industry body and the Commission must, no later than 10 working days after it gives a recommendation to the Minister for a gas governance regulation, publicise--- "(a) that recommendation; and "(b) the assessment completed under section 43GE. "(2) The Commission or the Minister must advise the Commerce Commission as soon as practicable after making any recommendation for a gas governance regulation that is likely to affect any powers of the Commerce Commission under Part IV or sections 70 to 72 of the Commerce Act 1986. ----------------------------------------------------------------------- New (majority) ----------------------------------------------------------------------- "43GG Urgent regulations Section 43GC (which relates to consultation) does not apply if the recommending body considers that it is necessary or desirable in the public interest that the proposed regulations be made urgently and, in this case, the recommendation must state that it is made in reliance on this section and then, within 6 months of those regulations being made,--- "(a) the recommending body must--- "(i) consult on the regulations in accordance with section 43GC; and "(ii) make a recommendation to the Minister on whether the regulations should be revoked, replaced, or amended; and "(iii) No later than 10 working days after making the recommendation, publicise the recommendation and the assessment completed under section 43GE; and "(b) after receiving that recommendation, the Minister must publish a notice in the Gazette stating whether or not he or she decides to recommend the revocation, replacement, or amendment of the regulations and explaining the reasons for that decision, or stating where copies of that explanation may be obtained,--- and then, within a further 6 months, the Minister must make that recommendation. ----------------------------------------------------------------------- New (majority) ----------------------------------------------------------------------- "Gas governance rules "43H Gas governance rules "(1) The Minister may make a rule for all or any of the purposes for which a gas governance regulation may be made. "(2) In deciding whether to make a rule rather than recommend the making of a gas governance regulation, the Minister must have regard to only--- "(a) the importance of the rule, including whether the rule has a material effect on the rights and interests of individuals: "(b) the subject matter of the rule, including whether the rule contains detailed or technical matters rather than matters of general principle: "(c) the application of the rule, including--- "(i) whether the rule applies principally to a particular group (eg, industry participants) rather than the general public: "(ii) whether the benefits of publication in accordance with section 43I rather than the Acts and Regulations Publication Act 1989 outweigh the costs of publication by that method: "(d) the expertise and rule-making procedures of the {agency} [recommending body] {that has recommended the rule (eg, the expertise of the Energy Commission)}. Struck out (majority) ======================================================================= "(3) If the Minister makes, or the Energy Commission recommends, a rule for a purpose for which a gas governance regulation may be made, the Minister and the Energy Commission must comply with the same conditions and process that would apply under section 43C or section 43E or section 43F if they were making recommendations on that gas governance regulation, and those sections apply (with all necessary modifications) accordingly. ======================================================================= New (majority) ----------------------------------------------------------------------- "(3) If the Minister makes, or the recommending body recommends, a rule for a purpose for which a gas governance regulation may be made, sections 43G to 43GG apply (with necessary modifications) as if the rule were a gas governance regulation. ----------------------------------------------------------------------- "(4) Section 43I applies to the method of making the rule. "(5) A rule is a regulation for the purposes of the Regulations (Disallowance) Act 1989 (but not for the purposes of the Acts and Regulations Publication Act 1989). "(6) To the extent that a rule is inconsistent with a gas governance regulation, the rule is subject to the gas governance regulation. "(7) A rule that is found by a court to be invalid solely because of a contravention of subsection (2) {or section 43D(2)(b) or section 43G(3)(b) or (c)} may not be declared to be invalid with effect earlier than 6 months after the date of the declaration. "43I Method of making gas governance rules "(1) A rule may be made under section 43H by the Minister publishing a notice in the Gazette that states--- "(a) the empowering provision for the gas governance regulation in relation to which the rule is made and a brief description of the nature of the rule; and "(b) where copies of the rule are available for inspection and purchase. "(2) The notice in the Gazette need not contain the rule. "(3) A rule comes into force 28 days after the date on which it is notified in the Gazette or on any later date stated in the notice. "(4) The Minister {or, if it is established, the Energy Commission} [and the recommending body] must make all of the rules made under section 43H available to the public by making copies of them available--- "(a) for inspection, free of charge,--- "(i) at the head office of the Ministry {or} [and] the principal office of the {Energy Commission} [recommending body] (during ordinary office hours) {, as the case requires}; and "(ii) on the Internet in an electronic form that is publicly accessible (at all reasonable times); and "(b) for purchase at a reasonable price. "Supplementary provisions "43J Supplementary empowering provision for regulations and rules "(1) Any regulations or rules made under this subpart may--- "(a) provide for {the establishment of} 1 or more persons or bodies or groups of persons to carry out functions in relation to those regulations or rules, and for matters concerning their [establishment,] constitution, functions, members (including their appointment, removal, duties, and protection from liability), procedures, employees, administration and operation, funding by industry participants, and reporting requirements: "(b) prescribe the form and manner in which information is to be disclosed: "(c) require disclosed information, or information from which disclosed information is derived (in whole or in part), to be certified, in the prescribed form and manner, by persons belonging to any specified class of persons: "(d) prescribe when and for how long information must be disclosed: "(e) exempt or provide for exemptions (including provide for the revocation of exemptions), on any terms and conditions, of any person or class of persons from all or any of the requirements in regulations or rules made under this subpart: "(f) provide for the supply of information for the purpose of administration and enforcement of this Act, and regulations and rules made under this Act: "(g) provide for transitional provisions: "(h) provide for any other matters contemplated by this Act or necessary for its administration or necessary for giving it full effect. "(2) Regulations or rules that may be made in respect of all industry participants or classes of industry participants may be made in respect of all or any of the persons in that class and in respect of all or part of their business. Struck out (majority) ======================================================================= "43K Supplementary empowering provision for regulations Any regulations made under sections 43C to 43F may--- "(a) provide for offences that are punishable by summary conviction for a contravention of those regulations, or of rules made under section 43H, and provide for penalties not exceeding $20,000 for those offences: "(b) provide for compensation, civil penalties, and other actions that may be taken in respect of contraventions of those regulations or of rules made under section 43H: "(c) confer and provide for rights of appeal and review in relation to decisions relating to contraventions of the regulations or of rules made under section 43H. ======================================================================= New (majority) ----------------------------------------------------------------------- "43K Supplementary empowering provision for regulations Any regulations made under this subpart may provide for offences that are punishable on summary conviction for a contravention of those regulations, or of rules made under section 43H, and provide for fines not exceeding $20,000 for those offences. ----------------------------------------------------------------------- New (majority) ----------------------------------------------------------------------- "Provisions that apply if gas governance regulations or rules are in force "43KA Party must co-operate with investigations Every industry participant must co-operate fully with any investigation carried out, for the purposes of monitoring or enforcing any gas governance regulations or rules, by the industry body or the Commission, or by an investigator appointed under those regulations,--- "(a) by providing, within any reasonable time specified by the industry body, Commission, or investigator, all information, papers, recordings, and documents concerning the matter that are in the possession, or under the control, of the industry participant and that are requested for the purpose of the investigation; and "(b) by permitting its officers or other employees to be interviewed (which interview may be recorded) and by ensuring as far as possible that they are made available for interview and answer truthfully and fully any questions put to them; and "(c) by giving to the industry body or the Commission, or any person authorised by the industry body or the Commission, at all reasonable times, full access to any premises (subject to complying with any safety requirements that apply to visitors to those premises) at which the industry participant carries on business or maintains records; and "(d) by giving all other assistance that may be reasonable and necessary to enable the matter to be fully investigated. ----------------------------------------------------------------------- New (majority) ----------------------------------------------------------------------- "43KB Privileges protected "(1) Section 43KA does not limit any claim for legal professional privilege. "(2) A person is not excused from answering a question or giving any information or document on the ground that to do so may incriminate or tend to incriminate that person. "(3) However, a self-incriminating statement or document made or given--- "(a) is not admissible as evidence in criminal or civil proceedings against that person; and "(b) may not be used against the person in any proceedings before the Rulings Panel, except for information provided under any self-reporting obligation under those regulations. ----------------------------------------------------------------------- New (majority) ----------------------------------------------------------------------- "43KBA Limits on investigation powers "(1) The industry body or the Commission may authorise, in writing, any person or persons to exercise all or any of the powers referred to in section 43KA(b) or (c) in respect of an industry participant. "(2) An authorised person must, before entering premises under section 43KA(c), give reasonable notice to the owner or occupier of the premises (at least 4 days before entry) of his or her intention to enter the premises. "(3) An authorised person must, on first entering any premises under section 43KA(c) and, if requested, at any later time, produce to the person apparently in charge of the premises the authorisation under subsection (1). "(4) If an authorised person enters any premises under section 43KA(c) and is unable, despite reasonable efforts, to find any person apparently in charge, the authorised person must, before leaving the premises, leave a written notice stating--- "(a) the authorised person's identity; and "(b) the address of premises where the authorised person may be contacted; and "(c) the date and time of entry; and "(d) the reasons for entering. "(5) Section 43KA(c) does not authorise an authorised person to enter a home, except with the consent of an occupier or under the authority of a warrant. "(6) An authorised person may apply for a warrant by written application on oath. "(7) A District Court Judge, Justice, or Community Magistrate, or a Court Registrar (not being a constable) who is satisfied that there are reasonable grounds to believe that it is necessary, for the purpose of ascertaining whether or not an industry participant has breached, or may breach, the gas governance regulations or rules, for an authorised person to search any place may, by warrant, authorise that person to search a place specified in the warrant. ----------------------------------------------------------------------- New (majority) ----------------------------------------------------------------------- "43KC Rulings Panel may make certain orders "(1) A Rulings Panel may, after considering any complaint or matter referred to it in respect of any allegation that an industry participant has breached any gas governance regulations or rules,--- "(a) decide that no action should be taken: "(b) issue a private warning or reprimand to an industry participant: "(c) issue a public warning or reprimand to an industry participant: "(d) impose additional or more stringent record-keeping or reporting requirements under or in connection with any gas governance regulation or rule: "(e) order an industry participant to pay a civil pecuniary penalty not exceeding $20,000: "(f) order an industry participant to pay a sum by way of compensation to any other person: "(g) order an industry participant that is found not to be complying with the gas governance regulations or rules to take any action that is necessary to restore it to a position of compliance: "(h) make an order terminating or suspending the rights of an industry participant under any gas governance regulation or rule: "(i) make orders regarding the reasonable costs of any investigations or proceedings: "(j) propose to the industry body or the Commission that it recommend to the Minister that a change should be made to a regulation or rule. "(2) In making any such decision, the Rulings Panel must take into account its previous decisions in respect of any similar situations previously dealt with by the industry body, the Commission, or the Rulings Panel. ----------------------------------------------------------------------- New (majority) ----------------------------------------------------------------------- "43KD Restriction of remedies "(1) The remedies provided for in section 43KC and in any gas governance regulations and rules are the only remedies in respect of a breach of those regulations or rules. "(2) No one can bring an action for breach of statutory duty that arises out of, or relates to, a breach of those regulations or rules by an industry participant. "(3) This section does not limit the recovery of--- "(a) a debt owing under any gas governance regulations or rules; or "(b) damages in tort other than breach of statutory duty, for breach of contract, or for any other wrong, that arises from any act or omission that is also a breach of those regulations or rules. ----------------------------------------------------------------------- New (majority) ----------------------------------------------------------------------- "43KDA Limit on tort claims against service providers "(1) No industry participant may bring an action in tort against a service provider that arises out of, or relates to, any act, matter, or thing done, or required or omitted to be done, by the service provider in its role as service provider, provided that the act or omission is not a fraudulent act or omission by the service provider. "(2) Service provider means a service provider appointed under the gas governance regulations. ----------------------------------------------------------------------- New (majority) ----------------------------------------------------------------------- "Appeals "43KE Appeals on ground of lack of jurisdiction An industry participant affected by a decision of the Rulings Panel may appeal that decision to the High Court on the ground of lack of jurisdiction. ----------------------------------------------------------------------- New (majority) ----------------------------------------------------------------------- "43KF Judicial review not precluded Nothing in this Act limits access to the courts in an action for judicial review. ----------------------------------------------------------------------- New (majority) ----------------------------------------------------------------------- "43KG Appeals on question of law in relation to decisions by industry body, Commission, or Rulings Panel "(1) There is a right of appeal to the High Court on a question of law only against a decision of the industry body, the Commission, or the Rulings Panel under any gas governance regulations or rules. "(2) The appeal must be made by giving notice of appeal within 20 working days after the date of the decision appealed against or within any further time that the Court allows. ----------------------------------------------------------------------- New (majority) ----------------------------------------------------------------------- "43KH Right of appeal against suspension or termination orders "(1) An industry participant in respect of which a suspension order or termination order is made may appeal to the High Court against the order. "(2) The appeal must be made by giving notice of appeal within 20 working days after the date of the order appealed against or within any further time that the Court allows. ----------------------------------------------------------------------- New (majority) ----------------------------------------------------------------------- "43KI Persons entitled to appeal The industry body, the Commission, and the following industry participants, may exercise a right of appeal under this Part: "(a) an industry participant in whose favour or against whom a decision or order of the industry body, the Commission, or the Rulings Panel is made: "(b) an industry participant who was a party to a dispute that was determined by the industry body, the Commission, or the Rulings Panel: "(c) any industry participant who joined as a party to the investigation of the matter that is subject to the appeal. ----------------------------------------------------------------------- New (majority) ----------------------------------------------------------------------- "43KJ Determination of appeals In its determination of any appeal (other than an appeal to the High Court by way of case stated for the opinion of the Court on a question of law only), the High Court may do any 1 or more of the following things: "(a) confirm, modify, or reverse the decision or any part of it: "(b) exercise any of the powers that could have been exercised by the industry body, the Commission, or the Rulings Panel in relation to the matter to which the appeal relates. Compare: 1986 No 5 s 93 ----------------------------------------------------------------------- New (majority) ----------------------------------------------------------------------- "43KK High Court may refer appeals back to industry body, Commission or Rulings Panel for reconsideration "(1) The High Court may, in any case, instead of determining any appeal, direct the industry body, the Commission, or the Rulings Panel to reconsider, either generally or in respect of any specified matters, the whole or any specified part of the matter to which the appeal relates. "(2) In giving any direction under this section, the Court must--- "(a) advise the industry body, the Commission, or the Rulings Panel, as the case may be, of its reasons for doing so; and "(b) give to the industry body, the Commission, or the Rulings Panel, as the case may be, any directions that it thinks just concerning the reconsideration or otherwise of the whole or any part of the matter that is referred back. "(3) In reconsidering the matter, the industry body, the Commission, or the Rulings Panel, as the case may be, must have regard to the Court's reasons for giving the direction, and the Court's directions. Compare: 1986 No 5 s 94 ----------------------------------------------------------------------- New (majority) ----------------------------------------------------------------------- "43KL Provisions pending determination of appeal If an appeal is brought under this Part against any decision of the industry body, the Commission, or the Rulings Panel, the decision to which the appeal relates remains in full force pending the determination of the appeal, unless the High Court orders to the contrary. Compare: 1985 No 5 s 95 ----------------------------------------------------------------------- New (majority) ----------------------------------------------------------------------- "43KM High Court may order proceedings be heard in private "(1) The High Court may, in its discretion, order that the hearing or any part of the hearing of any proceedings under this Part be held in private. "(2) The High Court may make an order prohibiting the publication of any report or description of proceedings or any part of proceedings (whether heard in public or in private), but no order may prohibit the publication of any determination of the Court. Compare: 1985 No 5 s 96 ----------------------------------------------------------------------- New (majority) ----------------------------------------------------------------------- "43KN Appeal to Court of Appeal in certain cases "(1) Any party to any appeal before the High Court against any decision of the industry body, the Commission, or the Rulings Panel, as the case may be, who is dissatisfied with any decision or order of the High Court may, with the leave of the High Court or of the Court of Appeal, appeal to the Court of Appeal. "(2) Section 66 of the Judicature Act 1908 applies to the appeal. "(3) In determining whether to grant leave to appeal under this section, the court to which the application for leave is made must have regard to the following matters: "(a) whether any question of law or general principle is involved: "(b) the importance of the issues to the parties: "(c) the amount of money in issue: "(d) any other matters that in the particular circumstances the court thinks fit. "(4) The court granting leave may, in its discretion, impose any conditions that it thinks fit, whether as to costs or otherwise. Compare: 1985 No 5 s 97 ----------------------------------------------------------------------- New (majority) ----------------------------------------------------------------------- "Subpart 1A---Co-regulation of gas industry "43KO Purpose of subpart The purpose of this subpart is to provide for co-regulation of the gas industry by the Government and an industry body. ----------------------------------------------------------------------- New (majority) ----------------------------------------------------------------------- "Approval of industry body "43KP Approval of industry body "(1) The Governor-General may, by Order in Council made on the recommendation of the Minister, approve a body to be an industry body for the purposes of this Part. "(2) Before making the recommendation, the Minister must be satisfied that--- "(a) the industry body is broadly inclusive of industry participants; and "(b) the constitution of the industry body requires the board of that body to have a majority of independent members, including an independent chairperson; and "(c) the industry body is capable of delivering outcomes that meet the Government's objectives for the gas industry; and "(d) the industry body has objectives, in its constitution, that are consistent with the objectives in section 43KR; and "(e) the industry body enables, and has provisions in its constitution that enable, all industry participants to become members of the industry body; and "(f) the constitution of the industry body requires it to report regularly to the Minister on--- "(i) the performance and present state of the New Zealand gas industry; and "(ii) the industry body's performance and achievement of its objectives; and "(iii) any other matters the industry body thinks fit or the Minister requests in writing. "(3) A member of the board is not independent if that person--- "(a) has a material financial interest in an industry participant; or "(b) is a director, officer, member, employee, or trustee of an industry participant; or "(c) is otherwise directly or indirectly materially interested in an industry participant. "(4) The references to "industry participants" in subsection (2)(a) and (e) do not include service providers appointed under any gas governance regulations. ----------------------------------------------------------------------- New (majority) ----------------------------------------------------------------------- "43KQ Revocation of approval of industry body "(1) The Governor-General may, by Order in Council made on the recommendation of the Minister, revoke any approval given under section 43KP. "(2) Before making a recommendation for the revocation of the approval of an industry body, the Minister must--- "(a) consult with the industry body; and "(b) be satisfied either that a Commission has been, or is to be, established or that the industry body has ceased to be a body that meets the criteria in section 43KP. ----------------------------------------------------------------------- New (majority) ----------------------------------------------------------------------- "Objectives of industry body in relation to recommendations for gas governance regulations "43KR Objectives of industry body in recommending regulations for wholesale market, processing facilities, transmission, and distribution of gas The objectives of the industry body, in recommending gas governance regulations under section 43C, are as follows: "(a) the principal objective is to ensure that gas is delivered to existing and new customers in a safe, efficient, and reliable manner; and "(b) the other objectives are--- "(i) the facilitation and promotion of the ongoing supply of gas to meet New Zealand's energy needs, by providing access to essential infrastructure and competitive market arrangements: "(ii) barriers to competition in the gas industry are minimised: "(iii) incentives for investment in gas processing facilities, transmission, and distribution are maintained or enhanced: "(iv) delivered gas costs and prices are subject to sustained downward pressure: "(v) risks relating to security of supply, including transport arrangements, are properly and efficiently managed by all parties: "(vi) consistency with the Government's gas safety regime is maintained. ----------------------------------------------------------------------- New (majority) ----------------------------------------------------------------------- "GPS objectives and outcomes "43KS Setting of GPS objectives and outcomes "(1) The Minister may set objectives and outcomes that the Government wants the industry body to pursue in relation to the governance of the gas industry, and against which the industry body must report. "(2) The Minister must set those objectives and outcomes by--- "(a) giving the industry body a statement of government policy containing those objectives and outcomes; or "(b) giving the industry body an amendment to, or replacement of, that statement. "(3) The Minister must publish in the Gazette, and present to the House of Representatives, each statement (or amendment to, or replacement of, a statement) under subsection (2) as soon as practicable after giving it to the industry body. "(4) The industry body must have regard to those objectives and outcomes when making recommendations for gas governance regulations under this Part. ----------------------------------------------------------------------- New (majority) ----------------------------------------------------------------------- "43KT What Minister can do with industry body recommendations about wholesale market, processing facilities, transmission, and distribution of gas "(1) The Minister must decide, within 90 days of receiving a recommendation from the industry body in relation to gas governance regulations under section 43C, either to accept or reject the recommendation. "(2) Subsection (1) does not apply to regulations made under section 43C(2)(c) prescribing terms and conditions for access to the Maui pipeline. "(3) The Minister must publish a notice in the Gazette stating his or her decision under subsection (1) and explaining the reasons for it or where copies of that explanation may be obtained. ----------------------------------------------------------------------- New (majority) ----------------------------------------------------------------------- "Industry body strategic plan "43KU Industry body strategic plan "(1) At or before the start of each financial year, the industry body must prepare a strategic plan for the industry body for that financial year and at least the 2 following financial years. "(2) The plan must contain the following information for the next financial year and at least the 2 following financial years: "(a) key background information about the industry body and its operating environment: "(b) the nature and scope of the industry body's intended operations: "(c) the specific impacts, outcomes, or objectives that the industry body seeks to achieve or contribute to and how those objectives might relate to any outcomes or objectives referred to in this subpart or in any GPS objectives and outcomes: "(d) how the industry body intends to conduct its operations to achieve those impacts, outcomes, or objectives: "(e) the main financial and non-financial measures and standards by which the future performance of the industry body may be judged: "(f) the matters on which the industry body will consult or notify the Minister before making a decision, the matters on which it will report to the Minister, and the frequency of reporting: "(g) other matters the industry body is required to include in the industry body strategic plan under this Act or another Act: "(h) any other matters that are reasonably necessary to achieve an understanding of the industry body's intentions and direction. "(3) The plan must also contain the information required by section 43KV for the first financial year to which it relates. "(4) The plan must be in writing, be dated, and be signed on behalf of the board by 2 members of the board of the industry body. ----------------------------------------------------------------------- New (majority) ----------------------------------------------------------------------- "43KV Extra information required in strategic plan for first financial year The industry body's strategic plan must contain the following information for the first financial year to which it relates: "(a) forecast financial statements for the industry body that have been prepared in accordance with the Financial Reporting Act 1993 as if the industry body were a reporting entity under that Act; and "(b) other measures and standards necessary to judge the industry body's performance at the end of the financial year; and "(c) a statement of all significant assumptions underlying the forecast financial statements; and "(d) any additional information and explanations needed to fairly reflect the forecast financial operations and financial position of the industry body. ----------------------------------------------------------------------- New (majority) ----------------------------------------------------------------------- "43KW Application and term of strategic plan An industry body strategic plan is in force--- "(a) from the later of--- "(i) the date on which the final plan is provided to the Minister; or "(ii) the first day of the period to which the plan specifies that it relates; and "(b) until a new strategic plan is in force in relation to the industry body (despite the end of any financial year to which the plan relates); and "(c) with any amendments that are made as described in section 43KY. ----------------------------------------------------------------------- New (majority) ----------------------------------------------------------------------- "43KX Process for providing strategic plan to Minister "(1) The industry body must provide a strategic plan to the Minister. "(2) The process that must be followed in providing a strategic plan is as follows: "(a) the industry body must provide a draft strategic plan to the Minister no later than 60 days before the start of each financial year; and "(b) the Minister must provide to the industry body any comments that he or she may have on the draft no later than 30 days before the start of the financial year; and "(c) the industry body must consider the comments (if any) on the draft and provide the final strategic plan to the Minister on or before the start of the financial year. ----------------------------------------------------------------------- New (majority) ----------------------------------------------------------------------- "43KY Amendments by industry body "(1) The industry body may amend its strategic plan. "(2) The industry body must amend its strategic plan if--- "(a) the information contained in it is false or misleading in a material particular; or "(b) the intentions and undertakings in it are significantly altered or affected by--- "(i) any change in the law; or "(ii) any other change in the industry body's operating environment. "(3) The industry body must make the amendment required under subsection (2) as soon as practicable after the industry body becomes aware of the facts that give rise to the obligation to amend under that subsection. "(4) The industry body must amend its strategic plan in accordance with the following process: "(a) the industry body must provide a draft amendment to the Minister; and "(b) the Minister must provide to the industry body any comments that he or she may have no later than 30 days after receiving the draft; and "(c) the industry body must consider the comments (if any) and must provide a final amendment to the Minister as soon as practicable; and "(d) the final amendment to the strategic plan is in force from the date on which the final amendment is provided to the Minister. ----------------------------------------------------------------------- New (majority) ----------------------------------------------------------------------- "43KZ Strategic plan must be publicised The industry body must publicise a final strategic plan or a final amended strategic plan as soon as practicable after it is provided to the Minister. ----------------------------------------------------------------------- New (majority) ----------------------------------------------------------------------- "Industry body annual report "43KZA Annual report "(1) Within 3 months after the end of each financial year, the industry body must deliver to the Minister an annual report of the industry body's operations and performance for that year, including--- "(a) information that is necessary to enable an informed assessment to be made of the industry body's operations and performance under this Part for that year, including an assessment against its strategic plan prepared under this subpart at the beginning of the year and against the GPS objectives and outcomes; and "(b) a report on the exercise of the powers conferred on it by this Part during the year; and "(c) audited consolidated financial statements for the industry body for that financial year that have been prepared in accordance with the Financial Reporting Act 1993 as if the industry body were a reporting entity under that Act; and "(d) the report on those financial statements that is signed by an auditor who was appointed or reappointed by the industry body within 12 months before the end of the period to which the statements relate; and "(e) a report of the matters required to be included in the annual report of a company by paragraphs (e), (f), and (g) of section 211(1) of the Companies Act 1993; and those paragraphs apply as if references to--- "(i) an accounting period were references to that year; and "(ii) the company were references to the industry body; and "(iii) a director or former director were references to a member or former member of the board of the industry body; and "(f) the disclosures required under section 43KZB; and "(g) any matters that relate to or affect the body's operations that the body is otherwise required, or has undertaken, or wishes to report on in its annual report. "(2) An annual report must be in writing, be dated, and be signed on behalf of the board of the industry body by 2 members of the board of the industry body. ----------------------------------------------------------------------- New (majority) ----------------------------------------------------------------------- "43KZB Disclosure of payments in respect of industry body board members and employees "(1) The annual report must include--- "(a) for each member of the board, the total value of the remuneration (other than compensation or other benefits referred to in paragraph (d)) paid or payable to the member during that financial year; and "(b) for each employee, the total value of the remuneration (other than compensation or other benefits referred to in paragraph (d)) paid or payable to the employee during that financial year; and "(c) the number of employees to whom, during the financial year, remuneration (other than compensation or other benefits referred to in paragraph (d)) was paid or payable in their capacity as employees, the total value of which is or exceeds $100,000 per annum, and the number of those employees in brackets of $10,000; and "(d) the total value of any compensation or other benefits paid or payable to persons who ceased to be members of the board or employees during the financial year in relation to that cessation and the number of persons to whom all or part of that total was paid or payable; and "(e) details of any indemnity provided during the financial year to any member of the board or employee; and "(f) details of any insurance cover effected by the board during the financial year in respect of the liability or costs of any member of the board or employee. "(2) In subsection (1), member and employee include a person who was a member of the board or employee at any time after the commencement of this section but who is no longer a member or employee. ----------------------------------------------------------------------- New (majority) ----------------------------------------------------------------------- "43KZC Annual report must be presented in House of Representatives The Minister must present a copy of the industry body's annual report to the House of Representatives as soon as practicable after receiving it. ----------------------------------------------------------------------- New (majority) ----------------------------------------------------------------------- "Miscellaneous provisions "43KZD Publication of industry body documents "(1) The industry body must publicise its annual report from the earlier of--- "(a) as soon as practicable after it is presented to the House of Representatives; or "(b) No later than 10 working days after it is delivered to the Minister. "(2) The industry body must publicise its constitution. ----------------------------------------------------------------------- New (majority) ----------------------------------------------------------------------- "43KZE Auditors For the purposes of the audit of any financial statements referred to in section 43KU, an auditor has, and may exercise and perform, all the functions, powers, and duties of an auditor under the Companies Act 1993 as if the industry body were a company. ----------------------------------------------------------------------- New (majority) ----------------------------------------------------------------------- "Levy to fund industry body "43KZF Industry body recommendation for levy regulations "(1) The industry body may recommend to the Minister that regulations be made under section 43KZI to require industry participants to pay a levy to the industry body. "(2) The recommendation may recommend different levies or levy rates for different classes of industry participants. ----------------------------------------------------------------------- New (majority) ----------------------------------------------------------------------- "43KZG Costs that may be met from levy "(1) Levy regulations under section 43KZI may provide for the levy to meet the following estimated costs: "(a) the costs of making recommendations concerning any gas governance regulations and rules under this Part: "(b) the costs of administering, monitoring compliance with, investigating, enforcing, and applying penalties or other remedies for contraventions of, gas governance regulations and rules, to the extent that the industry body is required to do so by those regulations or rules or requested to do so by any government policy statement applicable to the gas industry or the Minister: "(c) the costs of establishing, operating, and facilitating the operation of markets for industry participants (including by contracting with other parties, entering into a joint venture or contractual arrangement, or other means): "(d) the costs of establishing or implementing 1 or more complaints resolution systems: "(e) the costs of providing advice to the Minister on matters concerning the gas industry: "(f) the costs of governance of the industry body: "(g) the costs of collecting the levy: "(h) the costs of the industry body of carrying out any other functions or duties, or exercising any powers, under this Part. "(2) The levy may include any costs from the date on which the industry body is approved, even though regulations imposing the levy may be made after that date. "(3) The levy may--- "(a) deduct over-recoveries in respect of a financial year from the levy payable in subsequent financial years; or "(b) add under-recoveries in respect of a financial year to the levy payable in subsequent financial years. ----------------------------------------------------------------------- New (majority) ----------------------------------------------------------------------- "43KZH Minister must accept recommendations if certain conditions met "(1) The Minister may accept or reject a recommendation of the industry body to make levy regulations under section 43KZF. "(2) However, the Minister must accept that recommendation, and recommend to the Governor-General that levy regulations be made, if he or she is satisfied that--- "(a) the levy rate is reasonable, having regard to the industry body strategic plan, the latest industry body annual report, and any GPS objectives and outcomes; and "(b) the industry body has consulted with industry participants on the levy rate; and "(c) the requirements of sections 43KZF to 43KZI are met. ----------------------------------------------------------------------- New (majority) ----------------------------------------------------------------------- "43KZI Levy regulations that may be made "(1) The Governor-General may, by Order in Council made on the recommendation of the Minister, make levy regulations that meet the requirements of sections 43KZF to 43KZH. "(2) The levy regulations must prescribe the proposed amount of the levy, or the proposed levy rate according to which the amount of the levy may be calculated. "(3) The levy regulations must apply only to the financial year in respect of which the levy regulations are made. "(4) The levy regulations may require payment of a levy for a financial year or part financial year, irrespective of the fact that the regulations may be made after that financial year has commenced. "(5) Every industry participant (or prescribed class of industry participants) must pay to the industry body the levy that is prescribed. "(6) The amount of any unpaid levy is recoverable in any court of competent jurisdiction as a debt due to the industry body. ----------------------------------------------------------------------- New (majority) ----------------------------------------------------------------------- "43KZJ Expiry of subpart "(1) This subpart expires on the date on which subpart 2 comes into force. "(2) The expiry of this subpart does not affect any gas governance regulations or rules made on the recommendation of the industry body. ----------------------------------------------------------------------- "Subpart 2---Governance of gas industry [by Energy Commission] "Preliminary provisions "43L Purpose The purpose of this subpart is to enable the establishment of the Energy Commission to be responsible for--- "(a) developing recommendations on gas governance regulations or rules that promote its principal objective: "(b) other matters relating to the governance of the gas industry. "Energy Commission "43M Commission to govern gas industry established "(1) An Energy Commission is established. "(2) The Energy Commission is the same body as the Electricity Commission that is continued under subpart 1 of Part 15 of the Electricity Act 1992. "43N Continuation of Commission's functions, objectives, etc "(1) The {Energy} [Electricity] Commission continues under both the Electricity Act 1992 and this Act--- "(a) under the new name Energy Commission; and "(b) with the additional objectives, specific outcomes, functions, [powers,] and duties specified in this Act; but "(c) otherwise without any change in respect of its continuity, assets, rights, liabilities, and contracts. "(2) All references to the Electricity Commission in any enactment or document must be read as references to the Energy Commission. "43O Additional principal objective of Energy Commission "(1) The principal objective of the Energy Commission in relation to gas is to ensure that gas is delivered to existing and new customers in a safe, efficient, fair, reliable, and environmentally sustainable manner. "(2) This objective in relation to gas ranks equally with the objective specified in section 172N of the Electricity Act 1992 in relation to electricity. "43P Additional specific outcomes in relation to gas "(1) Consistent with its principal objective in relation to gas, the Commission must seek to achieve, in relation to gas, the following specific outcomes: "(a) the facilitation and promotion of the ongoing supply of gas to meet New Zealand's energy needs, by providing access to essential infrastructure and competitive market arrangements: "(b) energy and other resources are used efficiently: "(c) barriers to competition in the gas industry are {reduced} [minimised] to the long-term benefit of end-users: "(d) incentives for investment in gas processing facilities, transmission and distribution, energy efficiency, and demand-side management are maintained [or enhanced]: "(e) the full costs of producing and transporting gas are signalled to consumers: "(f) delivered gas costs and prices are subject to sustained downward pressure: "(g) the quality of gas services and in particular trade-offs between quality and price, as far as possible, reflect customer's preferences: "(h) risks relating to security of supply, including transport arrangements, are properly and efficiently managed by all parties: "(i) consistency with the Government's gas safety regime is {achieved} [maintained]: "(j) the gas sector contributes to achieving the Government's climate change objectives by minimising gas losses and promoting demand-side management and energy efficiency. "(2) These specific outcomes in relation to gas rank equally with the specific outcomes specified in section 172N of the Electricity Act 1992 in relation to electricity. "43Q Additional functions "(1) The functions of the Energy Commission in relation to gas are--- "(a) to formulate and make recommendations concerning gas governance regulations and rules in accordance with this Part: "(b) to administer, monitor compliance with, enforce, and apply penalties or other remedies for contraventions of, gas governance regulations and rules: "(c) to establish, operate, and facilitate the operation of (by contracting with other parties, entering into a joint venture or contractual arrangement, or other means) markets for gas industry participants: "(d) to undertake forecasting and modelling of future gas supply and demand: "(e) to promote improvement in the efficiency with which gas is used: "(f) to approve 1 or more complaints resolution system for the purpose of section 43B: "(g) to develop best practice methodologies and other standards and model agreements for use by gas industry participants: "(h) to provide advice to the Minister on matters concerning the gas industry: Struck out (majority) ======================================================================= "(i) to carry out any other functions the Minister may direct under section 172ZA of the Electricity Act 1992 (as applied by section 43U of this Act). ======================================================================= "(2) In performing its functions, the Energy Commission must promote its principal objective. "(3) The functions in this section rank equally with the functions specified in section 172O of the Electricity Act 1992. "43R Additional duties of members A member, when acting as a member, must not act as a representative of, or promote the interests or views of, any organisation to which the member belongs, a particular gas industry participant, or a particular group of gas industry participants. "Role of Energy Commission in relation to gas governance regulations and rules Struck out (majority) ======================================================================= "43S Energy Commission must make recommendations concerning gas governance regulations and rules "(1) The Energy Commission must, in accordance with this subpart, formulate and make recommendations concerning regulations or rules under the following sections: "(a) section 43C, which relates to regulations for the wholesale market, processing facilities, transmission, and distribution of gas: "(b) sections 43E and 43F, which relate to other gas governance regulations: "(c) section 43H, which relates to gas governance rules. "(2) The Commission's recommendations under subsection (1) may extend to the supplementary matters stated in sections 43J and 43K in relation to those regulations and rules. ======================================================================= Struck out (majority) ======================================================================= "43T Objectives of recommendations In formulating recommendations under section 43S this Part, the Energy Commission must--- "(a) have regard to its principal objective and specific outcomes in relation to gas; and "(b) ensure the recommendations are consistent with any direction under section 172ZA of the Electricity Act 1992 (as applied by section 43U of this Act). ======================================================================= New (majority) ----------------------------------------------------------------------- "43T Objectives of recommendations In formulating recommendations for gas governance regulations and rules, the Commission must give effect to its principal objective and specific outcomes and its GPS objectives and outcomes. ----------------------------------------------------------------------- "43U Consultation{, Ministerial directions,} and accountability sections apply Sections 172Z {to 172ZB} and 172ZJ to 172ZQ of the Electricity Act 1992 apply equally in relation to the Energy Commission and in respect of gas. "43V Levy of industry participants Section 172ZC of the Electricity Act 1992 applies--- "(a) as if references to industry participants applied equally to gas industry participants; and "(b) as if gas industry participants were levied for the estimated costs of performing the Commission's gas-related functions, powers, and duties, and electricity industry participants were levied for the estimated costs of performing the Commission's electricity-related functions, powers, and duties; and "(c) with all other necessary modifications. "43W Amendments to Ombudsmen Act 1975 and Public Finance Act 1989 "(1) The Ombudsmen Act 1975 is amended by omitting from Part II of the First Schedule the item relating to the Electricity Commission, and substituting, in its appropriate alphabetical order, the following item: Energy Commission and every subsidiary of the Energy Commission. "(2) The Public Finance Act 1989 is amended by omitting from the Fourth, Fifth, and Sixth Schedules the item relating to the Electricity Commission, and substituting, in its appropriate alphabetical order, the following item: Energy Commission. New (majority) ----------------------------------------------------------------------- "Subpart 3---Exemptions from restrictive trade practice provisions of Commerce Act 1986 "43X Authorisations for purposes of Commerce Act 1986 The following are specifically authorised for the purpose of section 43 of the Commerce Act 1986: "(a) any act, matter, or thing done, or omitted to be done, by the industry body or an industry participant in the course of, or for the purpose of,--- "(i) determining the form of the industry body's constitution and strategic plan, including any amendments to those documents: "(ii) complying with the constitution of the industry body, including any amendments to that constitution: "(iii) recommending any gas governance regulations or rules: "(iv) recommending a levy of industry participants in accordance with this Act: "(b) anything done, or omitted to be done, by the industry body, the Energy Commission, the Rulings Panel, or an industry participant, that is reasonably necessary to comply with, enforce, or otherwise administer any gas governance regulations or rules: "(c) the industry body's constitution and strategic plan and any amendments to those documents." ----------------------------------------------------------------------- Part 5 Amendments to Crown Minerals Act 1991 46 Crown Minerals Act 1991 called principal Act In this Part, the Crown Minerals Act 1991 1991 No 70 is called "the principal Act". 47 Functions of Minister of Energy Section 5 of the principal Act is amended by adding the following paragraph: "(d) the collection and disclosure of information in connection with petroleum reserves and petroleum production in order to--- "(i) promote informed investment decisions; and "(ii) improve security of supply in the gas and electricity markets." 48 New section 90A inserted The principal Act is amended by inserting, after section 90, the following section: "90A Disclosure of petroleum reserves and production information to Secretary and publication by Secretary "(1) Every holder of a permit relating to petroleum must provide to the Secretary all information in connection with petroleum reserves and petroleum production that is prescribed as information that must be provided under this section. "(2) The information must be provided in accordance with regulations made under this Act. "(3) The Secretary may, in accordance with regulations made under this Act, publish all or any part of the information provided under this section. "(4) For the purposes of this section, the holder of a permit relating to petroleum includes every person who is a holder of a licence issued under any previous enactment in respect of petroleum." 49 Regulations Section 105(1) of the principal Act is amended by inserting, after paragraph (g), the following paragraphs: "(ga) prescribing the information that must be provided under section 90A and the form, manner, and times in or at which that information must be provided: "(gb) prescribing the form, manner, and times in or at which the Secretary may publish any or all of the information that must be provided under section 90A:". Legislative history 28 October 2003 Introduction (Bill 86-1) 6 November 2003 First reading and referral to Commerce Committee