Source document: https://docs-lawep.s3.us-east-2.amazonaws.com/1698844847499.pdf (New Zealand)
Electricity Industry Bill Government Bill As reported from the Finance and Expenditure Committee Commentary Recommendation The Finance and Expenditure Committee has examined the Electri- city Industry Bill and recommends that it be passed with the amend- ments shown.

Introduction The Electricity Industry Bill seeks to reform various areas of the elec- tricity sector, and is intended to increase competition in the electri- city market and ensure security of supply.
The bill would modify governance arrangements in the industry, provide for specific regu- latory changes, and alter the overall structure of the electricity sector.
Specifically, the bill would disestablish the Electricity Commission and replace it with an Electricity Authority, allow lines businesses back into retailing, incorporate the provisions of the Electricity (Con- tinuance of Supply) Amendment Bill (as reported by the Commerce Committee in 2009), and reconfigure some assets of the three State- owned generators (Meridian Energy Limited, Mighty River Power Limited, and Genesis Power Limited).
111—2 2 Electricity Industry Bill Commentary This commentary concentrates on the more significant amendments we recommend to the legislation by majority, and discusses the major policy changes to the electricity industry that would be effected by the bill.

It does not discuss the various minor clarification amendments or drafting corrections that we propose.
State-owned enterprise asset transfers We were asked by the Minister of Energy and Resources to con- sider supplementary order paper No 121 alongside the bill.

The SOP sets out in detail asset transfer arrangements for the Tekapo A and B power stations, and is intended to minimise costs, risks, and delays in relation to the transfer of consents to Genesis, and to ensure that cur- rent effects on the environment and rights and obligations regarding the stations are maintained throughout the transfer.
Specifically, it provides for processes to deal with Waitaki Power Scheme consents in situations where consents may not be able to be simply transferred from Meridian to Genesis.

It would also protect the rights and obli- gations of third parties that have agreements with Meridian regarding the Tekapo A and B stations.

We recommend the inclusion in the bill of the provisions set out in the SOP, with some amendments, as dis- cussed below.
We recommend the insertion of new clause 124A into the bill, which sets out the purpose of the asset reconfiguration provisions.

We pro- pose an amendment to this clause as it was set out in the SOP, to en- sure that it refers to effects on the environment as specified in the con- sent conditions of the Waitaki Power Scheme.

The phrase “maintain current effects on the environment” might be interpreted too broadly.
As environmental effects may vary over time, we consider the clause should be narrowed to cover only those effects that result from the consent conditions.

We also propose that the clause make it clearer that the purpose of the provisions includes the maintenance of rights and obligations of permits and agreements with third parties.
The SOP as originally drafted included a provision which (if adopted) would have provided powers for shareholding Ministers to give di- rections on contracts between Meridian and Genesis, such as a water management agreement.

However, the drafting of the provision in the SOP would only have allowed a water management agreement to maintain environmental effects, which we consider is too narrow.
Commentary Electricity Industry Bill 3 We therefore recommend changes to the bill to allow wider powers for shareholding Ministers to give directions under clause 124(2)(d) that include any contracts necessary or desirable to achieve the pur- poses of new clause 124(1).
For clarification purposes, we also recommend that new clause 124G make it clear that nothing in the bill affects the Waitaki Catchment Water Allocation Plan, or affects the application of the Plan to con- sents amended or transferred as part of the asset transfer process.
Al- though it would not be appropriate for implementation of the Plan to be accelerated under the asset transfer provisions of the bill, we con- sider that some clarification that its application to amended or trans- ferred consents would be unchanged is necessary to avoid confusion.
We also recommend the insertion of new clause 124C, to allow the Minister of Energy and Resources, in consultation with the Minis- ter for the Environment, to change the permit conditions by order if it proves impracticable for generators to meet some Waitaki Power Scheme consent conditions.

In the bill as introduced, there are no provisions to resolve such a situation.

We consider that these amend- ments would provide for a timely and effective resolution in this situ- ation.
We also recommend the insertion of new clauses 124D to 124F, which concern existing arrangements with Meridian relating to the Waitaki Power Scheme and the Tekapo stations.

The new clauses provide for shareholding Ministers to direct Meridian and Genesis to negotiate the retention, transfer, sharing, or splitting of these agreements between themselves, then offer to third parties before a specified date any replacement agreements necessary to maintain the rights and obligations of the existing agreements.
However, in the event that this process does not lead to a satisfactory outcome, these new provisions would also allow the shareholding Ministers to direct the generators on which agreements are to remain with Meridian, which are to be transferred to Genesis, and which are to be shared by Genesis.

The provisions would also enable parties to the existing agreements other than Meridian or Genesis to terminate their agreements by notice to the Minister, Meridian, and Genesis.
The bill as introduced does not provide for resolutions in such circumstances.

These amendments would provide appropriate powers to deal with these situations if they should arise.

In new clause 124E we pro- 4 Electricity Industry Bill Commentary pose that Genesis and Meridian be permitted to offer more than one replacement contract to third parties, recognising that in some cases there will be two contracts, one from Meridian and one from Genesis.
We also consider that subclauses (6) and (7) should refer to rights, li- abilities, entitlements, and obligations; obligations are not included in the SOP as introduced.

Finally, we consider these two subclauses should apply from the date specified in a direction, rather than the date on which the transfer takes place (as proposed in the SOP).

This would better clarify their intent.


We also recommend, in new clause 124G(2), a provision that there is no right to appeal decisions or directions made under new clauses 124B to 124F.

We consider limiting rights of appeal to be justified by the need to prevent delays, given that the objective of the new subpart is to maintain current effects on the environment and rights and obligations.
We are advised that third parties would still have the right to terminate an agreement, and could also challenge the Minister’s interpretation of law through a judicial review.
We recommend that new clause 124D provide that, in addition to the agreements already in new schedule 4A, any other written agree- ments that the Minister considered directly related to the ownership and operation of Tekapo A and B power stations, and which Meridian would no longer require or be able to honour as a result of the transfer, are subject to the provisions in new clause 124E.
This would ensure that rights and obligations in other agreements not specifically pro- vided for in the schedule would be maintained.

We have not included all the agreements proposed in the SOP, as some have been replaced by subsequent agreements.

Other amendments We recommend replacing the provisions in clause 124(7) as intro- duced in order to extend the protections for directors to the State generator as well as its employees, contractors, and advisers (new clause 124AB).
The bill as introduced provides directors of a State generator with protections only in relation to following a direction from shareholding Ministers, and we consider it appropriate to ex- tend these protections to the company itself and to others who might otherwise be liable under a number of Acts for the consequences of following a Ministerial direction.
We also recommend that the pro- tections for directors, employees, contractors, and advisers (but not Commentary Electricity Industry Bill 5 the company itself) be extended to cover breaches of non-statutory duties, to remove the potential for personal liability to third parties for complying with a Ministerial direction.
Further, we also recommend inserting new clause 128 to provide that actions or omissions by a State generator pursuant to a Ministerial di- rection would be authorised under section 43 of the Commerce Act 1986.

This amendment would ensure protection from action should breaches or liabilities arise from directions regarding transfers and contracts, including water management agreements.
In addition, new subclause 2 would ensure that section 47 of the Commerce Act con- cerning business acquisitions would not apply to the transfer of as- sets.

While the risk of breaches of the Commerce Act would be low because transfers and contracts have a pro-competitive purpose, this amendment would remove the need for State generators to seek au- thorisations and clearances, which would be time-consuming and re- source-intensive.
Asset transfer issues We are aware of some concern about the benefits and risks of trans- ferring the Tekapo A and B power stations from Meridian Energy to Genesis Energy.

For example, some submitters were concerned that the transfer would reduce efficiency (by increasing water spill), se- curity of supply, the standard of flood management, and the reliability of irrigation, and disrupt established relationships and agreements, for little gain in retail competition.
There was also concern that a de- tailed cost-benefit analysis of the transfer had not been undertaken.

Conversely, some submitters were in favour of the asset transfer, ar- guing that it would improve competition in the retail market, espe- cially in the South Island, and help improve the competitive situation in the wholesale market, particularly with regard to water manage- ment.
We consider that the benefits of the transfer outweigh the risks, and are satisfied that sufficient cost-benefit analysis has been completed.

We believe that the transfer would create more retail competition in the South Island; this effect has been demonstrated to some extent already, with Genesis advertising competitive prices in the Christchurch, Dunedin, and Queenstown markets in anticipation of the transfer.
This competition implies more scope for interest 6 Electricity Industry Bill Commentary in building new generation in the South Island.

We also consider that the transfer is likely to introduce more diversity into the risk management of stored water.
While we acknowledge that there is a risk of the asset transfer re- ducing the efficiency of water management, we have been assured that this risk would be relatively small, as Genesis would have strong commercial incentives to operate the Tekapo stations in a similar way to Meridian.

In addition, we are advised that the water agreement between Meridian and Genesis is expected to include provision for management of extreme events, including flooding, very dry years, and excessive inflows.
Furthermore, we are advised that there is very little risk that the transfer will reduce security of supply; in fact, an increase, if anything, is more likely to result from higher average lake levels and more diverse views on the value of water at any given time.
We also consider that the provisions in the bill requiring the State generators to enter into long-term financial contracts with each other (“virtual asset swaps”) would encourage retail competition by Mighty River Power and Genesis in the South Island and Meridian in the North Island.

In addition, we consider that the proposed transfer of the Whirinaki power station would help to provide Meridian with capacity to back up its hydro generation, and partly compensate it for the loss of its Tekapo stations.
Implementation costs of virtual asset swaps are expected to be minimal, estimated at $1–2 million.

As the bill does not include the specific details of the virtual asset swaps, which are subject to discussion between the relevant entities and the Government, it is not appropriate for us to comment further on this matter.

Some of us have concerns about asset transfer issues, which we have discussed in our minority view.
We note that a reasonable phase-in period for the transfers is likely, which should minimise any resultant disruption.

We encourage the Government to consider a long transitional period for the virtual asset swaps and the Whirinaki transfer, to allow time for any problems created by the transfer to be dealt with adequately.
Therefore, we recommend inserting new clause 125 to make it clear that the reserve energy scheme should continue until (but not after) the sale of Whirinaki to Meridian is complete, unless an earlier date is set by the Minister.

This would ensure that Whirinaki could remain available, for example over winter 2011 if necessary, for security of supply purposes.
Commentary Electricity Industry Bill 7 Ownership and corporate separation thresholds for lines companies We recommend some amendments to Part 3 of the bill governing the rules for lines businesses undertaking generating and retailing, in order to increase ownership and separation thresholds.

Under the bill as introduced, lines companies could undertake retailing on their net- works without quantity caps, and build any type of generation.
Cer- tain restrictions would be placed on these activities, however, includ- ing a threshold of 100 MW at which ownership separation would be required between distribution (lines) businesses and generation; and a threshold of 5 GW/year for retail and 10 MW for generation for corporate separation and arm’s-length rules.

These thresholds are in- tended to prevent large-scale vertical integration of generator-retail- ers and lines businesses, and to reduce the risk of anti-competitive practices.
However, we consider that these thresholds are set too low in the bill as introduced, and might have the unintended effect of discouraging lines companies from entering generation or retailing, or from in- vesting in sufficient generation to manage plant risks and the risks of entering the retail market effectively.
Therefore, we recommend that the threshold for ownership separation be raised from 100 to 250 MW for generation connected to the grid, and the threshold for corporate separation be raised from 5 to 75 GW/year for retail and from 10 to 50 MW for generation (clause 74).
These amendments would pro- vide appropriate incentives for lines companies to enter retail and generation markets, while still preventing anti-competitive practices and large-scale vertical integration of lines with existing integrated generation-retailing companies.
We consider that these provisions should also make it clear that the ownership restrictions would apply only to generation connected di- rectly to the national grid, and that there would be no restriction on the quantity of generation a lines company might own connected to local networks.

Further, we recommend amendments to clause 7 of schedule 3 to raise the requirement for one independent director to two, because of the substantial increase in the threshold for corporate separation.
This would be more in line with guidance on independent directors from the Securities Commission and the New Zealand and Australian stock exchanges.

We consider this amendment necessary as we be- 8 Electricity Industry Bill Commentary lieve thresholds related to the size of a network would be more com- plex to administer, and cannot clearly be justified as compliance costs would be the same in all cases.

Some of us have concerns regarding changing thresholds, and have discussed this in our minority view.
Line tariff standardisation We recommend inserting new clauses 45(2)(e) and (ea).

Clause 45 provides for the Minister to amend the Electricity Industry Participa- tion Code to require more standardisation of line tariff structures and use-of-system agreements by lines companies.

We are assured that the relevant provisions of the Code in relation to this issue would not prevent tariffs for demand management.
We recommend that lines companies that directly bill their customers be exempt from the “more standardised tariff structure” requirement, because the com- plexity of line tariffs which are billed directly does not affect retail competition.
We also recommend that new clause 45(2)(ea) require use-of-system agreements to include indemnities for retailers for li- abilities under the Consumer Guarantees Act 1993 for breaches of acceptable quality caused by faults in the network over which the retailer has no control, because the lines business is a monopoly provider.

We consider this amendment necessary to ensure that re- tailers are not held responsible for issues they cannot control or in- fluence.
“Smart” electricity meters We considered including in the bill a provision to establish manda- tory standards for smart meters; however, the majority of us do not believe such a provision is necessary at this stage.
We are advised that the Electricity Commission considered this issue carefully in 2009, and concluded that regulation for home area network capability was not yet necessary in New Zealand for the following reasons: the tech- nology for smart meters is not fully developed yet, so there is a risk that mandated standards might become obsolete; there is a high level of compliance with existing voluntary guidelines; and regulating the rollout of smart meters now may incur further costs for consumers without providing many benefits.
The commission also noted that the case for regulation in New Zealand is less strong than elsewhere, Commentary Electricity Industry Bill 9 because ripple control of hot water can be used to manage peak load, and because the commission considers the rollout of smart meters to be progressing at a reasonable speed.
We were assured that the Electricity Authority would monitor the de- velopment of smart meters closely, and that its powers under the Elec- tricity Industry Participation Code allow it to set mandatory standards at any time.

In addition, we are advised that the Minister of Energy and Resources can request the Authority to review any matter, in- cluding smart metering, under clause 20 of the bill.
Electricity Authority To improve clarity and consistency, we propose amending the clauses governing the Authority’s powers relating to monitoring, investiga- tion, and enforcement, by deleting clause 21 and clauses 50 to 53, and redrafting them as new clauses 47A to 47D to restrict the Authority’s powers where they relate to monitoring.
We consider that the power to require information and other documents should be available only against industry participants (and not against “any person”), and the Authority should not be able to require access to premises for moni- toring purposes, even under a warrant.

We also recommend changes to the provisions relating to privileges (contained in proposed new clause 47D).
We propose that it be clearly stated that the prohibition on refusing to answer questions or provide documents applies to industry participants as well as their officers or employees.

In the bill as introduced, this is unclear.

However, we believe that the restriction on the use of self-incriminating statements and documents should apply only to officers and employees, because otherwise the value of the Authority’s power to require information and documents would be lost.
We also recommend amendments to clauses 12 and 13 to clarify the criteria for making, varying, and revoking individual exemptions from requirements to register as an industry participant and to comply with the Electricity Industry Participation Code.
We consider that the Authority should be able to grant individual exemptions only if it is satisfied that it is not necessary for an industry participant to be regis- tered and to comply in order to achieve its objectives under clause 17, and the exemption is desirable to reduce overall administration and compliance costs.
We believe that the Authority should be permitted 10 Electricity Industry Bill Commentary to vary or revoke an individual exemption if it is satisfied that it is necessary or desirable to do so to achieve the objectives under clause 17, and that this should outweigh any increase in administrative and compliance costs.
In addition, we consider that the Authority should be required to give notice to exempted parties (where they are identi- fiable) of its intention to vary or revoke an individual exemption, and give them a reasonable opportunity to comment.

These amendments should give more certainty to industry participants on the criteria and processes the Authority would use when considering exemptions and amendments to exemptions.
Rulings Panel We recommend a number of small amendments to some of the pro- visions governing Rulings Panel processes.

We recommend an amendment to clause 56(1)(d) to make the maxi- mum pecuniary penalty the Rulings Panel could impose $200,000.

The bill as introduced sets the maximum at $2 million.

We are con- cerned that a penalty as large as $2 million could, for instance, dis- courage industry participants from providing particular services or encourage unnecessary risk aversion.
Amending the maximum to $200,000 would make a substantial penalty available, while still min- imising possible disincentives to industry participants.

We also rec- ommend that clause 58 be amended to require the application of the listed criteria to the decision on whether to make a pecuniary penalty, and to determining the amount of any penalty.

At present, the cri- teria set out in the bill apply only to the decision on the amount of the penalty, and not on whether or not to impose it.
We also recommend amendments to clause 66 of the bill to widen the range of rulings that can be appealed against.

Under the bill as introduced, only suspension or termination orders and the amount of pecuniary and compensation orders could be appealed; we propose that this be widened to include orders for a public warning or repri- mand and compliance orders.

We consider this consistent with the principle of allowing appeals on decisions wherever possible.
How- ever, we do not believe that allowing appeals against other panel decisions, such as private reprimands or recommendations for rule changes, is warranted, because appeals against these decisions would be unnecessary or problematic.

For instance, rule changes proposed Commentary Electricity Industry Bill 11 by the panel would be subject to a thorough process under clauses 41 and 42 of the bill, so it would not be appropriate for them to be reviewed first by the courts.
We also recommend that clause 27 be amended to specify that the Minister of Energy and Resources would have the lead role in ap- pointing members to the Rulings Panel, in consultation with the Min- ister of Justice.

In the bill as introduced, the two ministers would be jointly responsible; we consider that it would be better to have one minister take the lead because it would be administratively compli- cated to have ministers acting jointly.
We also recommend the insertion of new clause 55(1) to provide that a hearing of the panel would have to comprise the chairperson (or deputy chairperson if the chairperson was not available) and two other members appointed by the chairperson (or deputy chairperson) from the panel.

In the bill as introduced, a hearing of the Rulings Panel could require five members, which we consider to be exces- sive.
We also propose an amendment to clause 27 to clarify that the Governor-General should appoint the chairperson and deputy chair- person.

We recommend amending clause 29 to specify that the remuneration of the Rulings Panel would be set by the Remuneration Authority, rather than by the Cabinet fees framework.

This would bring the panel into line with the remuneration determination for the Author- ity’s board.

However, expenses of the panel should be set in accord- ance with the Cabinet fees framework.
Enforcement of the Electricity Industry Participation Code We recommend an amendment to clause 57 to protect all market oper- ation service providers, not just the system operator, from tort action.

This amendment is consistent with current legislation, and would avoid higher costs for liability insurance (where it was available) and unnecessarily discouraging competition for service provider con- tracts.
We also recommend amendments to clause 119, which provides for regulations to be made on monitoring, investigating, and enforcing the Code.

We consider that the Minister should not need to consult with the Authority on the initial set of regulations, provided that the 12 Electricity Industry Bill Commentary regulations carry over the provisions of the Electricity Governance Regulations 2003 and that the Minister or the Electricity Commis- sion has consulted interested parties on any material amendments.
We therefore recommend the insertion of subclause (1A) to provide an exemption from the consultation requirements in these circum- stances.

Exempting the initial set of regulations from consultation would also mean that the initial set of regulations could come into effect on 1 October, the same day as the Authority would be estab- lished, as the Minister would not need to wait to consult with the Au- thority.
We also recommend amending the regulation-making power in this clause to include the ability to create offences, to ensure the regulations can be enforced.

We recommend that this clause make it clear that it would be an offence, punishable by a fine not exceed- ing $20,000, to fail to comply with a requirement of the regulations (clause 119(1)(h).
Consumer issues We recommend some amendments to the provisions allowing price restraint for line charges for domestic and rural consumers (contained in subpart 4 of Part 4, clauses 111 to 115, of the bill).

Specifically, we recommend that these provisions be narrowed to apply only to the rate of change of rural line charges relative to the rate of change of comparable non-rural line charges in the same network.
We also recommend moving these provisions to clause 120, which provides for regulation-making powers relating to tariffs and other consumer issues, and that new clause 120(2)(g) stipulate that fines for breaching regulations may be prescribed in the regulations up to a maximum of $100,000, rather than $500,000.
We believe that these provisions should be narrowed because, al- though the ability to regulate domestic line charges is now redundant as a result of the price control provisions in Part 4 of the Commerce Act 1986, some powers are still needed to reinforce the policy inten- tion of avoiding disparities between rural and non-rural line charges.
We also recommend amendments to clause 98, which relates to ex- emptions from the obligation to be a member of the dispute reso- lution scheme, to resemble the exemption provisions in clauses 12 and 13, and to reflect our proposed amendments to those provisions.

We believe that the criteria and processes for exemptions and their Commentary Electricity Industry Bill 13 variance and revocation should be spelt out in the bill, to make their intention clear and avoid any confusion about the process.
We also recommend amending clause 98 to insert a notification provision for exemptions.

The bill as introduced includes no requirement to pub- licise exemptions under this clause, even though the clause relates to a dispute resolution scheme that would allow complaints to be made by consumers.
This amendment would bring this provision into line with clauses 12 and 13, which would require the Electricity Author- ity to publicise a list of exemptions from registration and compliance with the Code respectively.
Supply to remote consumers We recommend amending clause 110 to make it clear that the Com- merce Commission must count the costs of alternative supply to re- mote consumers under clause 107(2) or the costs of an agreement to end the obligation to supply under clause 108(1) as a cost for the sup- ply of line function services, where those costs were lower than the cost of supplying line function services.
This amendment is intended to remove a disincentive, pointed out in submissions, for distribu- tors to offer and consumers to accept less costly alternative means of meeting their energy requirements.

Electricity prices We are aware of concern that electricity prices have risen substan- tially faster for retail customers than for commercial and industrial users in the past 10 or so years, and some submitters expressed their view that retail consumers may be effectively cross-subsidising these other groups.
Although we are advised that no cross-subsidisation is likely to be taking place in a technical sense, we believe it is clear that residential consumers are paying higher retail margins than other consumer groups.

We are informed that this is probably because of weak competition in the retail market for residential consumers, par- ticularly in the South Island.
While the bill promotes measures in- tended to improve competition, and thus help to constrain electri- city prices or price increases, we are advised that upward pressure on prices will continue because of the cost of building new power sta- tions and upgrading transmission infrastructure to meet demand, and the cost of gas to fuel power stations.
The majority of us believe that 14 Electricity Industry Bill Commentary the pro-competitive measures in the bill will go some way to combat substantial price rises, and look forward to seeing progress.

How- ever, some of us remain concerned that these measures alone will not reduce power prices, or stop large price increases, and consider that further initiatives are needed to effect such an outcome.
Amendments to the Commerce Act 1986 We recommend some further amendments to the Commerce Act, many of which are for clarification or to address drafting matters (subpart 4 of Part 5).

We recommend an amendment to clause 145(3) to allow the remain- ing trustees of consumer trusts to appoint one trustee until the next election in the event of a casual vacancy.

This should avoid the cost of unnecessary by-elections.
We also recommend an amendment to section 54V(4) of the Act (in clause 149) to allow more flexibility to the way the Commerce Commission applies quality standards set by the Electricity Author- ity when undertaking price-quality regulation of Transpower.

The additional flexibility would allow the Commerce Commission to de- velop effective incentives for Transpower to meet or exceed quality standards.
We also recommend that clause 47 be amended to insert a new provision for Transpower to recover its revenue from designated transmission customers, using the transmission pricing methodology in the Electricity Industry Participation Code.

We consider it desir- able to avoid disputes over the recovery of approved expenditure by Transpower.
We recommend the insertion of a transitional provision (new clause 139A) to allow for the costs of the Commerce Commission in prepar- ing to take on its new functions relating to grid upgrade proposals to be recovered by levies.

The levies are currently payable under sec- tion 53ZE of the Commerce Act.

The Commerce Commission began incurring these costs from 1 January 2010, but the levies would nor- mally apply only to costs incurred after this bill came into force.
We consider that this provision is justified as it would ensure that the commission would be ready to take up its new functions as soon as the bill was enacted.

We also recommend the insertion of new clause 142A, which is a substitution for clause 150.

Clause 150 would have allowed the mak- Commentary Electricity Industry Bill 15 ing of regulations to authorise repayment by the Commission of ex- cess application fees paid by those seeking a customised price-quality path.
New clause 142A would amend section 53Y of the Act, which allows for the recovery of the Commission’s costs through those fees.

New clause 142A would also clarify that the recoverable costs are those involved in assessing and reconsidering proposals, and not just in setting customised price-quality paths.
Finally, we recommend two minor amendments to clause 149 to make it clear that the Electricity Authority would be required to consult the Commerce Commission before implementing any changes to the Code which were likely to be relevant to the powers, duties, and functions of the Commission under the Commerce Act; and also that the Authority must advise the Commission on any new costs imposed on lines businesses or Transpower because of new Code or regulatory requirements.
Liquid hedge market We recommend that anything done or omitted by industry partici- pants to develop and operate a liquid hedge market be authorised under section 43 of the Commerce Act (clause 128).

We consider that a liquid hedge market is essential for facilitating competition in the electricity market, and specifically for encouraging entry by new generators and retailers such as lines businesses.
This amendment would avoid the need for industry participants to obtain authorisa- tions from the Commerce Commission, which could be time-con- suming and costly.

We are advised that the risks of industry participants developing anti- competitive practices under this amendment are minimal.

The Min- ister of Energy and Resources has set out strict requirements for an acceptable hedge market, in an effort to minimise barriers to entry and liquidity.
If these requirements are not complied with, or anti- competitive practices develop, the Electricity Authority, and subse- quently the Minister under clause 46, would have the power to set mandatory requirements under the Code.

Other minor amendments We recommend deleting clause 7, which contains the definition of “the electricity industry”.
We considered amending this definition, 16 Electricity Industry Bill Commentary which is unsatisfactory in excluding major electricity consumers and demand-side participants.

However, we were advised that finding a precise definition would be difficult, and as the clause was for ex- planatory purposes and had no legal effect, the most appropriate ac- tion would be to delete it.

We are assured that it will be sufficient to rely on the generally accepted meaning of “electricity industry”.
We also recommend an amendment to clause 46(3) to clarify that the Minister would be required to consult all interested parties before amending the Code.

In the bill as introduced, the Minister would have to consult only the Authority; we consider that all interested parties should be consulted on changes that may affect them.

We also recommend amending clause 90 to simplify the provisions relating to the disclosure of information to the Authority.
The bill as introduced would require all distributors selling electricity to con- nected customers to send an independently audited certificate to the Authority.
As this would be unduly onerous, especially if the thresh- old for corporate separation is raised as we recommend, we consider that the requirement should be that distributors selling more than 5 GWh/year on a local network must, within two months of the end of a financial year, disclose annually to the Commerce Commission the quantity of electricity sold by a connected retailer or retailers to customers connected to its local network.
We also recommend amending clause 120 to require the Minister to obtain and consider advice from the Authority on the impact of pro- posed regulations on efficiency, competition, and reliability.

We con- sider this amendment appropriate to ensure that the Minister would be fully aware of the consequences of regulating on issues affect- ing consumers.
We also recommend amending this clause to enable regulations to be made regarding the power to regulate charges for supply by alternative means to remote rural consumers under clause 107(2)(b).

This amendment would ensure rates were fair for rural remote consumers.1 Finally, we recommend amending the definition of “electrical instal- lation” in the Electricity Act 1992.
We recommend the definition spe- cify that an electrical installation does not include a generator within 1 This amendment formed part of the Commerce Committee’s recommenda- tions on the Electricity (Continuance of Supply) Amendment Bill, and was overlooked in error in the bill as introduced.

Commentary Electricity Industry Bill 17 a property where that generator is capable of supplying electricity to the supply system independent of the supply of electricity to an in- stallation on that property.
New Zealand Labour Party minority view Bill fails to balance essential priorities Labour opposes the Electricity Industry Bill because it fails to bal- ance the priorities of security of supply and transmission, affordabil- ity and predictability of pricing, and the sustainable production and use of electricity.

The bill fails to meet the Government’s own stated goals and objectives for the sector, and is in fact likely to exacerbate many of the problems which the sector currently faces.
Bill removes equity and environmental protections and imposes incoherent policy solutions The bill, if passed, will mean that it is no longer possible to regard electricity as anything akin to a public good in New Zealand.

Instead, it becomes an entirely tradable commodity.
By way of example, under existing legislation, the Electricity Commission, created by Labour to provide better coordination within the sector, has statutory objectives that include ensuring fairness and sustainability in the sup- ply of electricity.

These objectives are removed from the functions of the Electricity Authority, one of the bureaucracies proposed to re- place the Commission.
Domestic consumers and advocates of sus- tainable energy will thus be left with no option but to advance their interests by lobbying Ministers directly.

As in other energy policy-re- lated areas, such as the amendments last year to the Emissions Trad- ing Scheme, this is not coherent regulation based on well-analysed policy.

Instead, it perpetuates the present Government’s practice of promoting ad hoc policies.
Bill implements proposals that have not been properly evaluated Significant measures advanced by the bill, notably its central pro- posal to take generation assets from one State-Owned Enterprise and bestow them on another, have not been subject to rigorous analysis.

Nor have the risks arising from some of these proposals been prop- erly evaluated.
This view is shared by number of submitters, with 18 Electricity Industry Bill Commentary significant experience of the sector and whose views are entitled to weight, who told us that the level of analysis for the costs, benefits, and risks associated with some proposals was insufficient.

This view is reinforced by the Treasury’s Regulatory Impact Analysis Team, who considered the regulatory impact assessment for the bill was lacking in certain areas and should: • .

“.

.

.
“.

.

.

have included a more comprehensive discussion of the risks associated with proposed options”; “.

.

provide a better idea of the magnitude of costs and benefits of the options discussed in comparison to the problem they are trying to address”; have “.

.

.

better reflected the range of views received during consultation”; and have contained “.

.

.

a discussion of whether or not the options proposed have been tried overseas and, if so, what their impact was”.
• • • Bill will not control price increases The Government has stated that the central purpose of the Electricity Industry bill is to improve competition in the electricity market, and to improve security of supply.

But officials advised us that meas- ures to increase security of supply generally put upward pressure on prices.
Contact Energy Ltd confirmed in its evidence that it will need to continue to raise retail prices by up to 5 percent per annum if it is to continue to invest profitably in new generation capacity.

We are not confident that the measures contained in the bill will lead to lower price rises in the sector.

Bill’s asset-swap proposal will increase supply risks Instead, it is likely that electricity prices will continue to rise to reflect increased supply risks.
And the bill, if passed, will increase those risks.

As Trustpower has said: “the uncertainty created by the industry shake-up (is) likely to have a chilling effect on private electricity generators’ will- ingness to invest in new electricity plant, raising the prospect of shortages again within a decade”.2 2 National Business Review, 9 December 2009.
Commentary Electricity Industry Bill 19 The Ministerial Review in which the bill had its origins noted that New Zealand remains vulnerable to dry year shortages because of the predominance of hydro generation in New Zealand’s generation portfolio and the lack of options for hydro shortage.

The provisions in this bill that will see the transfer of the Tekapo A and B generation assets from Meridian Energy to Genesis will do nothing to increase security of energy supply.
Indeed, a number of reputable submitters were concerned that it will increase supply risks.

The Institution of Professional Engineers New Zealand (IPENZ) raised concerns that the transfer will compromise the integrity of the Waitaki hydro sys- tem, leading to suboptimal outcomes resulting from the joint oper- ation of the system by two generators leading to a reduction in se- curity of supply.
Compelling concerns were raised that the transfer will result in a loss of efficiency across the catchment from increased water spill from Lake Tekapo.

The transfer of physical assets contains a high degree of risk and few observable benefits.
The Ministry of Economic Development advised us that “it is not possible to prove that the benefits of the transfer will exceed costs and risks”.3 The Treasury also expressed scepticism about any net benefits arising out of the asset swap proposal, and considers that there are signifi- cant risks arising out of the proposed transfers, including the poten- tial for a loss of operational efficiency within the Waitaki catchment.
The Treasury also pointed to issues with resource consents relating to water usage within the Waitaki catchment that could flow from the transfer proposal.

We are not satisfied that these concerns have been addressed by suggested amendments to the bill.

A recent report from Standard and Poors also highlights a degree of risk from the asset transfer proposals.

Standard and Poors note that one of their biggest concerns is .

.

“.

sheets—the gentailers .

that without appropriate support to the balance .


do not have the financial head- .
3 Officials’ report on submissions to the Finance and Expenditure Committee, 16 April 2010, Electricity Industry Bill, p. 7 20 Electricity Industry Bill Commentary room to withstand the risks of transitioning to the new environment”.4 On balance, the suggested benefits of increased retail competition in the South Island (even if they eventuate which, according to the evi- dence we heard, is dubious) simply do not justify the risks that arise out of the proposal to transfer generation assets between generators.
Bill may undesirably entrench monopoly positions Ironically, given the overall thrust of the bill to introduce more mar- ket solutions to the energy sector, a number of submitters pointed to provisions that run the risk of entrenching natural monopolies, and therefore price increases, in some areas.
Examples to which we were directed include: • The removal of the role of consumers and sustainable energy suppliers in the conversion of the present Electricity Market Rulebook to the new Code, risking more oligopolistic be- haviour by generator retailers; The proposed standardisation of distribution price schemes, with a consequent risk that lines companies will lose oppor- tunities to reduce costs specific to their own networks; Establishing Transpower as the system operator by statute.
Retaining contestability in that role encourages the system op- erator to perform efficiently, operate independently, and in the best interest of the market overall; and Allowing lines companies back into retailing, if that occurs in a way that will create barriers to entry, especially in small network areas.

• • • Bill does nothing to bring coherence to energy policy framework We remain concerned that the Government proposes to proceed with the bill without reference to wider energy policy issues.
There is still no certainty over the status of the New Zealand Energy Strategy.
The Minister of Energy said in February 2010 that he would update that 4 Standard and Poors, 22 April 2010, press release, New Zealand Power Mar- ket Reforms Still Pose Major Credit Challenges for Generator-Retailers, Re- port says; Iyer, Parvathy, and Creed, Richard, 21 April 2010, Industry Report Card: Spotlight On New Zealand’s Power Generator-Retailers: Can Weak Balance Sheets Accommodate Market Reforms and Growth Ambitions?

Commentary Electricity Industry Bill 21 Strategy.


No further announcements on that update have been forth- coming.

A long-term plan for a sustainable energy sector is a key element of the Strategy.

It is folly to amend the legislative frame- work applicable to the electricity sector in the absence of any state- ment of the present Government’s long-term vision for the energy sector (if in fact such a vision exists).
But it perhaps serves to ex- plain the almost complete lack of regard for environmental and con- servation matters—such as a failure to promote smart metering—in a bill regulating a sector in which these should be amongst the primary considerations.

Conclusion The Electricity Industry Bill fails to address the major issues facing the electricity sector.

It will not deliver even on the priorities that the Government has set out for itself.
It is likely to exacerbate pressures on security of supply and electricity affordability.

At the earliest opportunity, a future Labour-led Government will re- peal it and replace it with a legislative framework that ensures that New Zealanders have a secure supply of electricity that is: • • • affordable; priced predictably; and produced and used sustainably.

22 Electricity Industry Bill Commentary Appendix Committee process The Electricity Industry Bill was referred to us on 15 December 2009.
The closing date for submissions was 26 February 2010.

We received and considered 51 submissions from interested groups and individu- als.

We heard 33 submissions.

We called for further submissions on Supplementary Order Paper No 121.

The closing date for submissions was Friday 14 May.

We re- ceived and considered 16 submissions, and heard nine submissions.

We received advice from the Ministry of Economic Development.
Committee membership Craig Foss (Chairperson) Amy Adams David Bennett Brendon Burns John Boscawen Hon David Cunliffe Aaron Gilmore Raymond Huo Rahui Katene Peseta Sam Lotu-Iiga Stuart Nash Dr Russel Norman Charles Chauvel replaced Raymond Huo and Dr Kennedy Graham replaced Dr Russel Norman for this item of business.
Electricity Industry Bill Key to symbols used in reprinted bill As reported from a select committee text inserted unanimously text deleted unanimously Hon Gerry Brownlee Electricity Industry Bill Government Bill Contents Title Commencement Act binds the Crown Part 1 Preliminary provisions Purpose Interpretation Extended meaning of breach Part 2 Electricity industry governance Subpart 1—Who does what Industry participants Industry participants Transpower is system operator Industry participants to register and comply with Code Exemption from obligation to register Exemption from obligation to comply with Code Electricity Authority Authority established Membership of Authority Independence of members of Authority Objective of Authority Functions of Authority Statements of government policy 111—2 Page 9 9 9 9 9 15 16 17 17 18 19 20 20 21 21 21 22 1 Electricity Industry Bill 20 Reviews on request by Minister Security and Reliability Council, and other advisory groups Charter about advisory groups Security and Reliability Council Other advisory groups Application of Crown Entities Act 2004 Rulings Panel Continuation of Rulings Panel Membership of Rulings Panel Function of Rulings Panel Funding of Rulings Panel and remuneration of members Subpart 2—Registration Register of industry participants Transfer of old information to register Registration and requirement to update information Ceasing to be registered Offences relating to registration Subpart 3—Electricity Industry
 Participation Code Content and status of Code Content of Code Status of Code Making and amending Code Content of initial Code Certification of draft Code Code comes into force Making Code accessible Authority amends Code Consultation on proposed amendments Urgent amendments to Code Authority to publish consultation charter Specific new matters in Code Specific new matters to be in Code Minister may amend Code to include new matters Other specific content Transmission agreements 22 23 24 25 26 27 28 29 30 31
agreements Electricity Industry Bill Subpart 4—Monitoring and enforcement Authority’s powers and procedures Purposes of exercise of Authority’s monitoring, investigation, and enforcement powers Authority’s monitoring, investigation, and enforcement powers Power to search Privileges protected Authority may suspend trading in case of insolvency Code enforcement Complaints, appeals, and disputes Interim injunctions Limitation periods for breaches of Code Powers and procedures of Rulings Panel Remedial orders for breach of Code Restrictions on remedies Pecuniary penalty orders Offence to breach certain orders of Rulings Panel Suspension and termination for breach of certain Rulings Panel orders Effect of suspension and termination orders Offences relating to suspension and termination orders Rulings Panel powers relating to appeals Rulings Panel powers relating to disputes Orders generally Appeals Appeal on ground of lack of jurisdiction Appeal on question of law Appeal against certain orders of Rulings Panel How and when appeals made Determination of appeals High Court may refer appeals back for reconsideration Provisions pending determination of appeal High Court may order proceedings be heard in private Appeal to Court of Appeal in certain cases 47A 47B 47C 47D 47E 48 49 54 55 56 57 58 59 60 61 62 62A 62B 63 64 65 66 67 68 69 70 71 72 38 39 40 40 41 42
Electricity Industry Bill Part 3 Separation of distribution from certain generation and retailing Subpart 1—Separation of distribution from certain generation and retailing Purpose and outline of Part Purpose and outline of this Part Interpretation of Part Interpretation in this Part Meaning of involved in Ownership separation Ownership separation Corporate separation and arm’s-length rules Corporation separation and arm’s-length rules
 applying to distributors and connected generators and connected retailers Other rules Use-of-systems agreements Person involved in distributor must not pay for transfer of retail customers to connected retailers No discrimination when paying rebates or dividends Subpart 2—Enforcement and general provisions Enforcement and penalties for this Part Pecuniary penalties Injunctions Actions for damages Other powers to give directions, reopen agreements Miscellaneous provisions relating to civil proceedings under this Part Application of Commerce Act 1986 provisions Additional proceedings Territorial application of this Part Application to persons outside New Zealand Disclosure and reporting to Authority Disclosure of information to Authority Directors must report compliance with arm’s-length rules Electricity Industry Bill Exemptions Exemptions Application of other Acts Application of Commerce Act 1986 Not interconnected under Commerce Act 1986 Illegal Contracts Act 1970 Substance matters, not form Part 4 Industry participants and consumers Subpart 1—Dispute resolution Complaints about Transpower, distributors, and retailers Membership of dispute resolution scheme Compliance with rules and binding settlements Offence to fail to comply with District Court order Subpart 2—Financial statements of customer and community trusts Customer and community trusts must
 prepare and submit for audit financial statements Publication of audited financial statements Auditor of trusts Procedures for annual meeting to appoint auditor Auditor-General to be auditor if no other auditor appointed Offences, enforcement, and application of sections 101 to 105 Subpart 3—Continuance of supply Continuance of distributors’ supply obligation Cessation and suspension of supply obligation Proposal to supply electricity from alternative source Application of other enactments Part 5 Miscellaneous
 Subpart 1—Regulations Regulations identifying industry service providers as industry participants Class exemptions relating to registration and Code compliance Class exemption relating to membership of dispute resolution scheme Electricity Industry Bill 119 120 121 122 Regulations relating to monitoring, investigating, and enforcing Code Regulations about tariffs and other consumer issues Regulations promoting accountability in customer trusts and community trusts General regulation-making power Subpart 2—State-owned enterprise asset reconfiguration and miscellaneous matters State-owned enterprise asset reconfiguration: General provisions Interpretation for subpart Directions that may be given by shareholding Ministers 123 124 124AA Process for giving directions 124AB Legal effect of directions Asset reconfiguration provisions in respect of Waitaki Power Scheme 124A Purposes of sections 124B to 124G 124B Process for Meridian and Genesis to recommend changes to permit conditions in respect of Waitaki Power Scheme 124C Minister may change permit conditions by order 124D Existing agreements with other parties in respect of Waitaki Power Scheme 124E Reconfiguration of existing agreements 124F Other provisions about directions 124G Interface with Resource Management Act 1991 Asset reconfiguration provision in respect of Whirinaki
 125 Obligation of Authority relating to Whirinaki Levy of industry participants 126 127 Levies Consultation about request for appropriation Specific authorisations for purposes of Commerce Act 1986 128 Specific authorisations for purposes of Commerce Act 1986 Distributors’ exemption from liability 128A Distributors exempt from liability for certain outages Subpart 3—Transitional and consequential provisions 129 Interpretation 6 83 84 86 87 90 90 91 91 92 93 93 94 95 97 97 97 98 100 101 101 102 Electricity
 Industry Bill Dissolution of Electricity Commission Electricity Commission dissolved Consequences of dissolution References in documents to Electricity Commission Transferred employees Government Superannuation Fund Complaints, investigations, etc, transfer to Authority 130 131 132 133 134 135 135A References to Electricity Governance Rules 2003 136 Members of Rulings Panel 137 Work of Rulings Panel Rulings Panel 138 139 Commerce Commission Investigations relating to separation of distribution from generation and retailing Exemptions granted under Electricity Industry Reform Act 1998 139A Levies must provide for Commerce Commission preparation costs to be recovered Subpart 4—Amendments to other enactments Amendments to Commerce Act 1986 Amendments to Commerce Act 1986 Interpretation 140 141 142 Matters covered by input methodologies 142A Commission’s costs in setting customised price-quality path Interpretation for subpart 143 144 Meaning of electricity lines services Definition of consumer-owned 145 How exempt status can be lost and default/customised 146 price-quality regulation can be applied to consumer-owned suppliers Administrative settlements with Transpower made before 1 April 2009 New heading and sections 54R and 54S substituted 148 147 Transpower grid upgrade plans and capital expenditure proposals 54R 54S Approval of Transpower’s grid upgrade plans Commission to prepare input methodology for capital expenditure proposals 149 New section 54V substituted
 102 103 105 105 106 107 108 108 108 109 109 110 110 110 110 111 111 111 112 114 115 115 115 117 118 7 Electricity Industry Bill 54V Interface with Electricity Industry Act 2009 Impact of certain decisions made under Electricity Industry Act 2009 Amendments to Energy (Fuels, Levies, and References) Act 1989 Amendments to Energy (Fuels, Levies, and References) Act 1989 Part 2 repealed Purpose of levies 151 152 153 Amendments to Electricity Act 1992 Amendments to Electricity Act 1992 154 154A Purposes 155
 156 Interpretation New section 43A inserted 43A Different Ministries responsible for different codes 118 119 120 120 120 120 120 121 121 157 Consequential amendments and repeal of spent provisions 121 Repeal of Electricity Industry Reform Act 1998 158 Repeal of Electricity Industry Reform Act 1998 Amendments to other enactments 159 Amendments to other enactments Schedule 1 Material incorporated by reference Schedule 2 When person is involved in distributor, generator, or retailer for purposes of Part 3 Schedule 3 Arm’s-length rules Schedule 4 Dispute resolution scheme Schedule 4A Existing agreements in respect of Waitaki Power Scheme Schedule 5 Amendments to other enactments 122 122 123 126 136 143 154 157 8 Electricity Industry Bill Part 1 cl 5 The Parliament of New Zealand enacts as follows: 1 2 2 (1) (2) 3 4 5 Title This Act is the Electricity Industry Act 2009.
Commencement This Act comes into force on 1 October 2010.

Commencement Sections 37 and 38, 123 to 125, and 128 come into force on the day after the date on which this Act receives the Royal assent.

The rest of this Act comes into force on 1 October 2010.

Act binds the Crown This Act binds the Crown.

5 10 Part 1 Preliminary provisions Purpose The purpose of this Act is to provide a framework for the regu- lation of the electricity industry.
15 Interpretation In this Act, unless the context otherwise requires,— ancillary service agent means a person who, pursuant to an 20 agreement with the system operator, provides frequency keep- ing, instantaneous reserve, voltage support, over frequency re- serve, black start, or any other ancillary service specified in the Code, and as defined in the Code approved test house means a meter testing and calibration 25 facility that has been approved in accordance with the proced- ures in the Code Authority, or Electricity Authority, means the Electricity Authority established by section 14 breach has the meaning given in section 8 30 9 Part 1 cl 5 Electricity Industry Bill Code, or Electricity Industry Participation Code, means the Code administered by the Authority, as brought into force under section 39 and amended from time to time under sec- tions 41, 43, or 46 clearing manager means the person appointed by the Author- 5 ity to act as the clearing manager under the Code community trust, in relation to a distributor or a retailer, means a trust in respect of which— (a) at least 90% of the income beneficiaries comprise per- sons who are a class or classes identified by reference to 10 their domicile or location or operation within the geo- graphic area or areas of operation of the distributor or retailer; and at least 90% of its income distributions are paid to those beneficiaries or for purposes related to that geographic 15 area or areas (b) consumer means any person who is supplied, or applies to be supplied, with electricity other than for resupply customer co-operative, in relation to a distributor or a retailer, means a co-operative company (as defined in section 2(1) of 20 the Co-operative Companies Act 1996) that has the character- istics described in the definition of customer trust in this sec- tion, applied as if references to trusts were to co-operatives, references to income beneficiaries were to shareholders, and all other necessary modifications were made customer trust, in relation to a
 distributor or a retailer, means a trust in respect of which— (a) at least 90% of the income beneficiaries comprise per- sons who are a class or classes identified by reference to any of— (i) 25 30 the person’s connection to the lines of the dis- tributor: the person’s liability for payment for supply of electricity from the retailer that retails to cus- tomers that are connected to the distributor’s net- 35 work: the person’s receipt of electricity from the retailer that retails to customers that are connected to the distributor’s network: (ii) (iii) 10 Electricity Industry Bill Part 1 cl 5 (iv) (v) the person’s liability for payment for the connec- tion to the lines of the distributor: the person’s liability for payment for line services supplied by the distributor; and (b) at least 90% of its income distributions are paid to those 5 beneficiaries distribution means the conveyance of electricity on lines other than lines that are part of the national grid distributor means a business engaged in distribution domestic consumer means a person who purchases or uses 10 electricity in respect of domestic premises domestic premises means premises that are used or intended for occupation by a person principally as a place of residence; but does not include premises that constitute any part of premises described in section 5(c) to (k) of the Residential 15 Tenancies Act 1986 (which refers to places such as jails, hos- pitals, hostels, hotels, and other places providing temporary accommodation) generation means the generation of electricity that is fed into the national grid or a network generator means a business engaged in generation industry participant, or participant, means a person, or a person belonging to a class of persons, identified in section 9 as being a participant in the electricity industry industry service provider means a person who— (a) provides a service or performs a role in the electricity industry that is recognised in the Code, including the people
 listed in section 9(2); but is not any of the industry participants identified in sec- tion 9(1)(a) to (h) (g) (b) 25 20 30 line function services has the meaning given in section 2(1) of the Electricity Act 1992 lines means works used or intended to be used to convey elec- tricity load aggregator means a person who contracts with 1 or more 35 consumers so that the person is able to deal with the electri- city otherwise required by those consumers in any way, includ- ing putting in place agreements under which those consumers 11 Part 1 cl 5 Electricity Industry Bill 5 voluntarily change their consumption level, so that the person is able to offer the combined increase or reduction in the in- terruptable load of all those consumers as collective demand, either in the wholesale electricity market or under any other bilateral agreement or contract market operation service provider means the system oper- ator and any of the following persons appointed by the Au- thority under the Code: (a) (b) (c) (d) (e) (f) metering equipment owner and meter owner means a per- 15 son who owns any or all of the items of metering equipment installed in a metering installation metering equipment provider means a person who, in ac- cordance with the Code,— (a) (b) the registry manager: the reconciliation manager: the pricing manager: the clearing manager: the market administrator: the wholesale information trading system provider assumes responsibility for any metering installation; or 20 is appointed to be responsible for any metering instal- lation 10 Minister, in any provision, means the Minister of the Crown who, under the authority of any warrant or with the authority of the Prime Minister, is responsible for the administration of 25 that provision or the Part containing that provision Ministry, in any provision, means the department responsible for the administration of that provision or the Part that contains that provision national grid means the lines and associated equipment
 used 30 or owned by Transpower to convey electricity network means a distributor’s lines and associated equipment used for distribution publicise, in relation to a document or information being pub- licised by a person, means making the document or informa- 35 tion available, at no cost to the public free of charge,— (a) on the person’s Internet site at all reasonable times (ex- cept to the extent that doing so would infringe copyright 12 Electricity Industry Bill Part 1 cl 5 in the material or be inconsistent with any enactment or rule of law); and (b) in any other manner that the person may decide publicly available, in relation to making a document or infor- mation available, means that— (a) the document or information is available for inspection, free of charge, on an Internet site that is publicly acces- sible at all reasonable times (except to the extent that doing so would infringe copyright in the material or be inconsistent with any enactment or rule of law); and a copy of the document or information is available for inspection at all reasonable times, free of charge, at the head office of the person required to make it publicly available or, if the person is a Minister, at the head office of the relevant Ministry; and copies of the document may be purchased by any person at a reasonable price (b) (c) 5 10 15 purchaser means an industry participant who buys electricity from the clearing manager; and includes any other participant that has assumed that person’s rights and obligations in rela- 20 tion to the purchaser regulations means regulations made under this Act retailer means a business engaged in retailing retailing means the sale of electricity to a consumer other than for the purpose of resale Rulings Panel means the Rulings Panel continued by section 26 system operator means the person who ensures the real-time co-ordination of the electricity system, and is the person re- ferred to in section 10 trader in electricity means a person who trades in
 electricity or electricity derivatives, and includes— (a) a person who buys or sells contracts under which the payment obligations may change according to the changes in the price at which electricity is bought or 35 sold in any market in New Zealand; and any related clearing house or exchange (b) 25 30 13 Part 1 cl 6 Electricity Industry Bill transmission means the conveyance of electricity through the national grid Transpower means Transpower New Zealand Limited or any subsidiary of, or successor to, that company works means— (a) means any fittings (as defined in section 2(1) of the Electricity Act 1992) that are used, designed, or in- tended for use in or in connection with the generation, conversion, transformation, or conveyance of electri- city; but does not include— (i) (b) fittings used, or designed or intended for use, by any person in or in connection with the gener- ation of electricity for that person’s use and not for supply to any other person; or any part of an electrical installation (as defined in section 2(1) of the Electricity Act 1992).
(ii) 5 10 15 20 Definitions of industry service providers identified in section 9 In this Act, unless the context otherwise requires,— ancillary service agent means a person who, pursuant to an agreement with the system operator, provides an arrangement or service that supports the operation of the electricity mar- ket or the security of the electricity system and includes black start, over frequency reserve, frequency keeping, instantan- 25 eous reserve, and voltage support approved test house means a meter testing and calibration facility that has been approved in accordance with the proced- ures in the Code load aggregator means a person who contracts with 1 or more 30 electricity consumers so that the person is able to deal with the electricity otherwise required by those consumers in any way, including putting in place arrangements under which those consumers voluntarily change their consumption level so that the person is able to offer the combined increase or reduction 35 in the interruptable load of all those consumers as collective 6 14 Electricity Industry Bill Part 1 cl 8 demand to balance supply, either in the wholesale electricity market or under any other bilateral agreement or contract market operation service provider means any of the follow- ing persons appointed by the Authority under the Code: (a) (b) (c) (d) (e) (f) metering equipment provider means a person who— (a) the person providing registry services: the reconciliations manager: the pricing manager: the clearing manager: the market administrator: the wholesale information trading system provider (b) owns any or all of the items of metering equipment in a metering installation; or assumes, under the Code, any of the obligations of a person referred to in paragraph (a) in respect of any 15 item of metering equipment in a metering installation 5 10 trader in electricity means a person who trades in electricity or electricity derivatives, and includes— (a) a person who buys or sells rights or obligations under contracts that provide for contracts under which the 20 payment obligations may change according to changes in the price at which electricity is bought or sold in any market in New Zealand; and any related clearing house or exchange.
(b) Compare: SR 2003/374 r 4 7 8 (1) References to electricity industry In this Act, references to the electricity industry refer primarily to businesses involved in the generation, transmission, distri- bution, and retailing of electricity, and not to retail consumers or those directly engaged in electrical work.
Extended meaning of breach In this Act, the regulations, and the Code, unless the context otherwise requires, a reference to a person who breaches a provision of this Act, the regulations, or the Code is a reference to a person who— (a) (b) breaches the provision; or attempts to breach the provision; or 15 25 30 35 Part 2 cl 9 Electricity Industry Bill (c) (d) (e) (f) aids, abets, counsels, or procures any other person to breach the provision; or induces, or attempts to induce, any other person, whether by threats or promises or otherwise, to breach the provision; or is in any way, directly or indirectly, knowingly con- cerned in, or party to, the breach by any other person of the provision; or conspires with any other person to breach the provision.
(2) A breach includes a failure to comply.
Compare: SR 2003/374 r 5(1) Part 2 Electricity industry governance Subpart 1—Who does what Industry participants Industry participants The following are industry participants for the purposes of this Act: (a) (b) (c) (d) (e) (f) a generator: Transpower: a distributor: a retailer: any other person who owns lines: a person who consumes electricity that is conveyed to the person directly from the national grid: a person, other than a generator, who generates electri- city that is fed into a network: a person who buys electricity from the clearing man- ager: the system operator: any industry service provider identified in subsection (2).
(fa) (g) (h) (i) The following industry service providers are industry partici- pants (see: section 6): (a) (b) (ba) a market operation service provider: a metering equipment provider: a metering equipment owner: 9 (1) (2) 16 Electricity Industry Bill Part 2 cl 11 (c) (d) (e) (f) (g) an ancillary service agent: a person that operates an approved test house: a load aggregator: a trader in electricity: any other industry service provider identified in regula- 5 tions made under section 116.
(3) The Authority is not an industry participant, except to the ex- tent that it performs functions as an industry service provider.

Compare: SR 2003/374 r 4 Transpower is system operator The system operator is Transpower.

10 (1) (2) As well as acting as system operator for the electricity industry, the system operator must— (a) provide information, and short- to medium-term fore- casting on all aspects of security of supply; and (3) (b) manage supply emergencies.
The Code must— (a) (b) specify the functions of the system operator; and specify how the system operator’s functions are to be performed; and set requirements relating to transparency and perform- ance.

(c) (4) A failure to comply with subsection (2) is to be treated, for the purposes of enforcement under this Part, as a breach of the Code.
Compare: SR 2003/374 r 30 10 15 20 25 11 (1) Obligations of industry participants Industry participants to register and comply with Code Every industry participant must— (a) register as an industry participant by supplying the Au- 30 thority with the information specified in section 30(2); and comply with the Code.
(b) (2) A failure to comply with subsection (1) may result in an industry participant being— 35 17 Part 2 cl 12 Electricity Industry Bill (a) (b) liable to conviction for an offence under section 34, in the case of failure to register; and subject to the enforcement measures set out in this Part, in the case of failure to comply with the Code.
Exemption from obligation to register 12 (1) Despite section 11(1)(a), an industry participant need not 5 register if— (a) (b) it is a member of a class of industry participants identi- fied in regulations made under section 117 as a class of industry participants that is exempt from the obliga- 10 tion to register; or the Authority issues a exempts the participant by issuing an individual exemption notice in the Gazette that— (i) states that identifies the industry participant that is exempt from the obligation to register; and includes a statement of the gives reasons for the exemption.
(ii) 15 (1A) The Authority may grant an individual exemption to an indus- try participant only if the Authority is satisfied that— (a) it is not necessary, for the purpose of achieving the Au- 20 thority’s objective under section 17, for the participant to be registered; and exempting the participant will reduce overall adminis- tration and compliance costs.
(b) (1B) The Authority may amend or revoke an individual exemption, 25 by issuing a notice in the Gazette that identifies the exempt participant and gives reasons for the amendment or revocation, but only if the Authority— (a) has given notice of the proposed amendment or revoca- tion to the exempt participant and given the participant 30 a reasonable opportunity to comment on the proposal; and is satisfied that— (i) the amendment or revocation is necessary or de- sirable for the purpose of achieving the Author- 35 ity’s objective under section 17; and (b) 18 Electricity Industry Bill Part 2 cl 13 (ii) the benefit of the amendment or revocation out- weighs any disadvantage resulting from any in- creased administration and compliance costs.
(2) (2) (3) is not a regulation for any purpose; and To avoid doubt, a notice issued under subsection (1)(b)— (a) (b) may be amended or revoked at any time.

To avoid doubt, an individual exemption notice issued under subsection (1)(b) is not a regulation for any purpose.

The Authority must publicise a list of all current class and individual exemptions.
5 10 Exemption from obligation to comply with Code 13 (1) Despite section 11(1)(b), an industry participant need not comply with the Code, or specific provisions of the Code, if— it is a member of a class of industry participants identi- (a) fied in regulations made under section 117 as a class 15 of industry participants that is exempt from the obliga- tion to comply with the Code or specific provisions of the Code; or the Authority issues a exempts the participant by issuing an individual exemption notice in the Gazette that— 20 states that identifies the industry participant that (i) is exempt from the obligation to comply with the Code or specific provisions of the Code; and includes a statement of the gives reasons for the exemption.
(ii) (b) 25 (1A) The Authority may grant an individual exemption to an indus- try participant only if the Authority is satisfied that— (a) it is not necessary, for the purpose of achieving the Au- thority’s objective under section 17, for that partici- pant to comply with the Code or the specific provisions 30 of the Code; and exempting the participant will reduce overall adminis- tration and compliance costs.
(b) (1B) The Authority may amend or revoke an individual exemption, by issuing a notice in the Gazette that identifies the exempt 35 participant and gives reasons for the amendment or revocation, but only if the Authority— 19 Part 2 cl 14 Electricity Industry Bill (a) (b) has given notice of the proposed amendment or revoca- tion to the exempt participant and given the participant a reasonable opportunity to comment on the proposal; and is satisfied that— (i) the amendment or revocation is necessary or de- sirable for the purpose of achieving the Author- ity’s objective under section 17; and the benefit of the amendment or revocation out- weighs any disadvantage resulting from any in- 10 creased administration and compliance costs.
(ii) 5 is not a regulation for any purpose; and To avoid doubt, a notice issued under subsection (1)(b)— (a) (b) may be amended or revoked at any time.

To avoid doubt, an individual exemption notice issued under 15 subsection (1)(b) is not a regulation for any purpose.

The Authority must publicise a list of all current class and individual exemptions.

Electricity Authority Authority established The Electricity Authority is established.
The Authority is a Crown entity for the purposes of section 7(1) of the Crown Entities Act 2004 (and, by virtue of being named in Part 3 of Schedule 1 of that Act, is an independent Crown entity).

The Crown Entities Act 2004 applies to the Authority except to the extent that this Act expressly provides otherwise.

Compare: 1992 No 122 s 172M (2) (2) (3) 14 (1) (2) (3) The Authority comprises between 5 and 7 members.
15 Membership of Authority (1) (2) When recommending a person for membership of the Author- ity, the Minister must have regard to the need to ensure that the Authority has amongst its members knowledge and experience of, and capability in, the following: the electricity industry: (a) consumer issues: (b) 20 20 25 30 35 Electricity Industry Bill Part 2 cl 18 (3) business generally.
(c) The Minister may not recommend a person for membership of the Authority unless he or she has first publicised an invi- tation for nominations from interested parties and considered any nominations received.
Compare: 1992 No 122 s 172R 5 Independence of members of Authority 16 (1) No member of the Authority, when acting as a member, may represent, or promote the interests or views of, any organisa- tion to which the member belongs, or any particular industry 10 participant or group of industry participants.

This section does not limit, and is in addition to, the duties of members set out in Part 2 of the Crown Entities Act 2004.
Compare: 1992 No 122 s 172S (2) 17 18 (1) 15 20 Objective of Authority The objective of the Authority is to promote competition in, reliable supply by, and the efficient operation of, the electricity industry for the long-term benefit of consumers.
Compare: 1992 No 122 s 172N Functions of Authority The Authority’s functions are as follows: (a) to maintain a register of industry participants in accord- ance with subpart 2, and to exempt individual industry participants from the obligation to be registered: to make and administer the Electricity Industry Partici- 25 pation Code in accordance with subpart 3: to monitor compliance by industry participants with the Code (see subpart 4): to investigate, and take enforcement action in respect of, breaches and possible breaches of the Code by industry 30 participants (see subpart 4): to monitor and enforce compliance with the Act and regulations generally (see section 21): to monitor compliance with the Act, the regulations, and the Code: 35 (b) (c) (d) (e) (c) 21 Part 2 cl 19 Electricity Industry Bill (d) (e) (f) (g) (h) (i) (j) 5 to investigate and enforce compliance with this Part, Part 4, the regulations, and the Code (see subpart 4 of this Part): to investigate and enforce compliance with Part 3 (see subpart 2 of Part 3): to undertake market-facilitation measures (such as pro- viding education, guidelines, information, and model arrangements), and monitoring to monitor the operation and effectiveness of market facilitation measures (see section 21 47A): to undertake industry and market monitoring, and carry out and make publicly available reviews, studies, and inquiries into any matter relating to the electricity in- dustry (see section 21): to contract for market operation services (but see sub- 15 section (2)) and system operator services: to promote to consumers the benefits of comparing and switching retailers: to perform any other specific functions imposed on it under this or any other Act.
10 20 Instead of, or as well as, contracting for market operation ser- vices, the Authority may itself perform— (a) the functions of the market administrator, if the Author- ity considers it desirable to do so; and any other market operation service, but only on a tem- 25 porary basis (such as when there is no current contract, or the contractor is unable or unwilling to perform the service).
(b) Compare: 1992 No 122 s 172O Statements of government policy In performing its functions, the Authority must have regard to any statements of government policy concerning the electri- city industry that are issued by the Minister.

Before issuing a statement under this section, the Minister must consult with the Authority.
Every statement of government policy concerning the electri- city industry must be— (a) conveyed to the Authority in writing; and 30 35 (2) 19 (1) (2) (3) 22 Electricity Industry Bill Part 2 cl 20 (b) (c) notified in the Gazette; and presented by the Minister to the House of Representa- tives; and (d) made publicly available.
(4) A statement of government policy concerning the electricity 5 industry— (a) comes into effect on the date specified in the Gazette notice, which must be on or after the date of the notice and is to be treated as the date on which the statement is issued; and (b) may be amended, revoked, or replaced in the same way it may be given.
Compare: 1992 No 122 s 172ZK; 1986 No 5 s 26; 2004 No 115 s 115 10 Reviews on request of by Minister 20 (1) On written request by the Minister, the Authority must review 15 and report on any matter relating to the electricity industry that is specified by the Minister.

The Minister must consult the Authority before issuing a re- quest for a review.
(2) (3) When requesting a review, the Minister may, without limita- 20 tion,— (a) (b) (c) specify a date by which, or a period within which, the Authority must provide its report; and give the Authority any specific directions about how to conduct the review (such as directions about consult- 25 ation, the issue of draft reports, timing); and specify particular matters that the Authority is to con- sider.
(4) If, in the course of a review, the Authority considers that there are matters that fall outside the scope of the review but which 30 it should nevertheless report on to the Minister, the Authority may include a report on those matters in the final report or in a separate report.

(5) Within 15 days after receiving a final report on a review con- ducted under this section, the Minister must make the report 35 publicly available.
23 Part 2 cl 21 Electricity Industry Bill (6) However, in making the report publicly available, the Minister may omit any information that he or she would be likely to withhold if it were requested under the Official Information Act 1982.
21 (1) Co-operation with Authority For the purpose of carrying out its functions under section 18(e) to (g), the Authority may require any person to co-op- erate with it by doing any of the following: (a) 5 provide, within any reasonable time specified by the Authority, any information, papers, recordings, and 10 documents that are in the possession, or under the control, of the person and that are requested for the purpose: permit (which interview may be recorded) and ensure as far as 15 possible that they are made available for interview and answer truthfully and fully any questions put to them: give all other assistance to the Authority that it reason- ably requires.
its officers or employees to be interviewed (b) (c) (2) A person who fails to comply with a requirement of the Au- 20 thority under this section commits an offence and is liable on summary conviction to a fine not exceeding $20,000.
Compare: 1992 No 122 s 172KB Security and Reliability Council, and other advisory groups Charter about advisory groups The Authority must make, and make publicly available, a char- ter that sets out— (a) how it will establish and interact with advisory groups appointed under sections 23 and 24; and (b) when and how it will consult advisory groups on mater- (c) ial changes to the Code; and how advisory groups must operate, including provisions concerning procedure.
25 30 Before making a charter, the Authority must consult interested 35 parties on a draft charter.

22 (1) (2) 24 Electricity Industry Bill Part 2 cl 24 (3) The Authority and all advisory groups must comply with the charter made under this section.

(3A) The first charter must be made within the first year after this section comes into force.
(4) Until the first charter is made under this section,— 5 (a) (b) the Authority may establish and interact with advisory groups as it thinks fit; and advisory groups may determine their own procedure, subject to any specific directions or requirements of the Authority.

10 23 (1) (2) (3) (4) (5) (6) (7) 24 (1) (2) Security and Reliability Council The Authority must appoint a Security and Reliability Council.
The functions of the Security and Reliability Council are is to advise provide independent advice to the Authority on— (a) the performance of the electricity system and the system 15 operator; and reliability of supply issues.

(b) The Council must meet at least once every 6 months.

The Council may determine its own procedure, subject to this Act and the charter (once made) prepared under section 22.
The Authority must ensure that the members of the Council have between them appropriate knowledge and experience of the electricity industry to provide advice to the Authority, but members need not be independent persons.

The Authority may not appoint a person as a member of the 25 Council unless the Authority has first publicised a call an in- vitation for nominations for membership and considered any nominations made received.
The terms of appointment as a member of the Council are as determined by the Authority on an individual basis.

30 20 Other advisory groups The Authority must establish 1 or more other advisory groups to provide independent advice to the Authority on the devel- opment of the Code, and on market facilitation.
Every advisory group must include people who the Author- 35 ity considers have appropriate knowledge of, and experience 25 Part 2 cl 25 Electricity Industry Bill in, the electricity industry and consumer issues, but members need not be independent persons.
Application of Crown Entities Act 2004 The following provisions of the Crown Entities Act 2004 apply, with all necessary modifications, to or in respect of 5 each member of an advisory group appointed under section 23 or 24 (an advisory group member) as if the advisory group were a statutory entity: (a) sections 43, 47, 48, 57, 77, 118, 120 to 126, 120, 121, 126, and 135, 152, 189, and 190: sections 62 to 72, as if the disclosure required by those sections must be made to both the relevant advisory group and the Authority.
(b) 10 Section 47(1) of the Crown Entities Act 2004 (which is about remuneration) applies to advisory group members as if the ad- 15 visory groups were autonomous Crown entities.

Each advisory group member is deemed to be a member of the Authority for the purpose of— (a) the Authority indemnifying the member under section 122 of the Crown Entities Act 2004; and the Authority effecting insurance cover under section 123 of that Act; and the application of section 125 of that Act.
(c) For the purpose of section 152 of the Crown Entities Act 2004 (which is about disclosing payments in an annual report), the 25 Authority must treat each advisory group member as if he or she were a member of the Authority.

(b) 20 Rulings Panel Continuation of Rulings Panel There continues to be a Rulings Panel.

The Rulings Panel is the same body as the body established by regulation 160 of the Electricity Governance Regulations 2003.
Compare: Electricity Governance Regulations 2003 Reg 160 SR 2003/374 r 160 30 35 25 (1) (2) (3) (4) 26 (1) (2) 26 Electricity Industry Bill Part 2 cl 28 27 Membership of Rulings Panel (1) The Rulings Panel comprises up to 5 members appointed by the Governor-General on the joint recommendation of the Minister and the Minister of Justice.

(2) One member must be appointed as the chairperson of the Rul- 5 (3) (4) (2) (3) (5) 28 ings Panel.
The member appointed as the chairperson must be a barrister or solicitor of the High Court of at least 7 years’ standing.

The Minister and the Minister of Justice may not recommend an appointment to the Rulings Panel unless they have con- 10 sulted with the Authority on the recommendation.
The Governor-General must appoint— (a) 1 member to be the chairperson of the Rulings Panel, who must be a barrister or solicitor of the High Court of at least 7 years’ standing; and 1 member to be deputy chairperson of the Rulings Panel.

(b) 15 The Governor-General may make an appointment under sub- section (1) or (2) only in accordance with a recommendation by the Minister given after the Minister has consulted with the 20 Minister of Justice and the Authority.
Further provisions relating to the membership of the Rulings Panel are may be set out in regulations made under section 119.
Compare: SR 2003/374 rr 162, 165(1) 25 Functions of Rulings Panel The functions of the Rulings Panel are— (a) to consider and determine complaints of breaches of the Code, regulations made under section 119, and orders made by the Rulings Panel; and to determine disputes between industry participants that are referred to it in accordance with regulations made under section 119; and to make appropriate remedial and other orders; and to review any suspension of trading made by the Au- 35 thority under section 49.
30 (b) (c) (d) Compare: SR 2003/374 r 161 27 Part 2 cl 28 Electricity Industry Bill 28 Function of Rulings Panel The function of the Rulings Panel is— (a) to assist in the enforcement of the Code by— (i) (ii) (iii) hearing and determining complaints about breaches or possible breaches of the Code; and hearing and determining appeals from certain de- cisions made under the Code; and considering and resolving certain disputes be- tween industry participants relating to the Code; and 5 10 (iv) making appropriate remedial and other orders; and (b) (c) to review any suspension of trading by the Authority under section 47E; and to exercise any other functions conferred on it under this 15 Act or the regulations.
Compare: SR 2003/374 r 161 29 (1) (2) (3) Funding of Rulings Panel and remuneration of members The Authority must fund the Rulings Panel.

The Authority may recover the costs of that funding from in- 20 dustry participants through levies payable under section 126.
The remuneration of members of the Rulings Panel, other than remuneration covered by subsection (4), must be set by the Remuneration Authority under section 12(1)(a)(va) of the Re- muneration Authority Act 1977 as if the members were mem- 25 bers of an independent Crown entity.
(4) Members of the Rulings Panel are entitled, in accordance with the fees framework (as defined in section 10(1) of the Crown Entities Act 2004), to be reimbursed for actual and reasonable travelling and other expenses incurred in carrying out their 30 functions as members.

Compare: SR 2003/374 r 176 Subpart 2—Registration Register of industry participants The Authority must maintain and publicise a register of indus- 35 try participants.
30 (1) 28 (2) (3) (4) 31 Electricity Industry Bill Part 2 cl 32 (b) (c) (d) (b) The register must record— (a) the name, contact details, and business details of every current industry participant, other than a participant that is exempt from the obligation to register: the date on which a participant’s name was first entered 5 in the register: the date and nature of every subsequent change to the details recorded for each participant: the name of every person who, after this section comes into force, has been recorded as a current industry par- 10 ticipant but subsequently ceases to be.
For the purposes of the register,— (a) an industry participant’s contact details are its physical address, postal address, telephone number, fax number, and email address; and an industry participant’s business details are details about the nature of its business (for example, whether it is involved in generation, transmission, distribution, retailing, or a combination of any of these).
15 The register may, but need not, contain the names of all or any 20 industry participants that are exempt from the obligation to be registered.
Compare: SR 2003/374 rr 9, 10, 12 Transfer of old information to register The name, contact details, and business details of every per- 25 son that, immediately before this section comes into force, is recorded as an industry participant on the register maintained by the Electricity Commission under regulation 9 of the Elec- tricity Governance Regulations 2003— (a) must be transferred to the register maintained under 30 (b) section 30(1); and is deemed to have been recorded on that register on the date on which the register is established.
Registration and requirement to update information 32 (1) An industry participant is registered as soon as its information 35 is recorded, or deemed to be recorded, on the register.

29 Part 2 cl 33 Electricity Industry Bill (2) A registered industry participant must supply updated infor- mation, as soon as practicable, if its name, contact details, or business details change.
Compare: SR 2003/374 rr 8, 11 33 (1) Ceasing to be registered The Authority must remove an industry participant’s name, contact details, and business details from the register of current registered participants if satisfied that the person has ceased to be a participant; but the Authority may retain a record of the participant’s name and business details on the register as a 10 former participant.
5 (2) A person ceases to be a registered industry participant when the person’s name is no longer recorded in on the register as a current industry participant.

(3) An industry participant’s obligations under the Code, and any 15 proceedings underway or orders in effect under the Code, are not affected merely because the participant ceases to be regis- tered as a current participant.
Compare: SR 2003/374 r 14 Offences relating to registration 34 (1) An industry participant that fails, without reasonable excuse, to register as an industry participant commits an offence and is liable on summary conviction to a fine not exceeding $20,000.
(2) A registered industry participant commits an offence, and is 20 liable on summary conviction to a fine not exceeding $20,000, 25 if it knows or ought to know that the information recorded for it on the register is wrong or incomplete and it fails to supply updated information as required by section 32(2).
Subpart 3—Electricity Industry Participation Code Content and status of Code 30 Content of Code The Code may contain any provisions that are consistent with the objective of the Authority and are necessary or desirable 35 (1) 30 Electricity Industry Bill Part 2 cl 36 to promote any and or all of the following, consistent with the objective of the Authority: (a) (b) (c) (d) (e) competition in the electricity industry: the reliable supply of electricity to consumers: the efficient operation of the electricity industry: the performance by the Authority of its functions: any other matter specifically referred to in this Act as a matter for inclusion in the Code.
5 The Code may not— (a) impose obligations on any person other than an industry 10 participant or a person acting on behalf of an industry participant, or the Authority; or purport to do or regulate anything that the Commerce Commission is authorised or required to do or regulate under Part 3 or 4 of the Commerce Act 1986 (other than 15 to set quality standards for Transpower and set pricing methodologies (as defined in section 52C of that Act) for Transpower and distributors); or purport to regulate any matter dealt with in or under the Electricity Act 1992.
20 (b) (c) (b) The Code may incorporate by reference any of the following: New Zealand standards, or standards, requirements, or (a) recommended practices of any overseas or international body: codes of practice issued under Part 4 of the Electricity 25 Act 1992: any other written material dealing with technical mat- ters that, in the opinion of the Authority,— (i) (ii) is too long to publish as part of the Code; or it is impracticable to publish as part of the Code.
30 (c) Schedule 1 applies to any material incorporated by reference into the Code.

Status of Code The Code is a regulation for the purposes of the Regulations (Disallowance) Act 1989 but is not a regulation for the pur- 35 poses of the Acts and Regulations Publications Act 1989.
31 (2) (3) (4) 36 (1) Part 2 cl 37 Electricity Industry Bill (2) 37 (1) (2) If any provision of the Code conflicts with this or any other Act, or with any regulation made under this or any other Act, the Act or regulation prevails.
Making and amending Code Content of initial Code The Code made under section 39 must comprise— (a) a consolidation of the following enactments: (i) 5 the Electricity Governance Rules made under section 172H of the Electricity Act 1992: subpart 2 of Part 1, Part 2, Part 2A, and Part 3 and 10 Parts 2, 2A, and 3 of the Electricity Governance Regulations 2003: subpart 2 of Part 10 of the Electricity Govern- ance Regulations 2003 (the Comalco agreements exemptions): the Electricity Governance (Security of Supply) Regulations 2008: the Electricity Governance (Connection of Dis- tributed Generation) Regulations 2007: 15 (ii) (iia) (iii) (iv) (b) (c) provisions referred to in section 10(3) (concerning the 20 system operator): provisions to give effect to any exemptions granted under subpart 1 of Part 10 of the Electricity Governance Regulations 2003.
The Code must include whatever changes to the text of the 25 enactments referred to in subsection (1)(a) are necessary or reasonably required to ensure that the Code is— (a) is consistent with this Act and, the regulations, and any amendments made to other enactments by this Act; and is accurate and coherent; and addresses any transitional issues.

(b) (c) 30 (2A) To avoid doubt, the Code must not include provisions relating to statements of opportunities or grid planning assumptions.
The Code is deemed to include the provisions of any regula- tions or rules made, within 6 months before this section comes 35 into force, under section 172E(3) of the Electricity Act 1992 (which relates to regulations and rules made urgently); but— (3) 32 Electricity Industry Bill Part 2 cl 40 (a) (b) the provisions expire on the date that is 6 months after the date on which those regulations and rules come into force; and the text of those regulations and rules need not be in- cluded in any draft or final copy of the Code that is pub- 5 licised or made publicly available.
Certification of draft Code The Minister must certify a draft Code that complies with sec- tion 37.

The Minister must make reasonable efforts to ensure that the 10 certified draft is publicised at least 1 month before this section section 39 comes into force.

The Minister’s certificate is conclusive evidence that the draft complies with section 37.

Code comes into force The certified draft Code comes into force as the Code on the day this section comes into force.
That Code is deemed to have been made by the Authority on that day.

15 20 40 Making Code accessible (1) The Authority must make the Code, and all amendments to it, publicly available.

The Minister must present a copy of the Code, and of all amendments to it, to the House of Representatives in accord- ance with section 4 of the Regulations (Disallowance) Act 25 1989.
The Authority may periodically issue and make publicly available consolidated versions of the Code with all amend- ments incorporated, in which case the consolidation must clearly show the date on which it is issued and when each 30 amendment was made.

38 (1) (2) (3) 39 (1) (2) (2) (3) 33 Part 2 cl 41 Electricity Industry Bill 41 (1) Authority amends Code The Authority may amend the Code at any time, subject to section 42 of this Act and section 54V of the Commerce Act 1986.
(2) An amendment may be an addition, an omission, a substitu- 5 tion, or a complete replacement.

(3) An amendment is made by— (a) (b) publicising the amendment; and giving notice in the Gazette of— (i) the date on which the amendment comes into 10 force; and a short summary of what the amendment contains or relates to.

(ii) (4) An amendment may not come into force until a date that is at least 28 days after the date of the Gazette notice.
15 42 (1) (2) Consultation on proposed amendments Before amending the Code, the Authority must— (a) (b) (c) publicise a draft of the proposed amendment; and prepare and publicise a regulatory statement; and consult on the proposed amendment and the regulatory 20 statement.
The regulatory statement required for a proposed amendment to the Code must include the following: (a) a statement of the objectives of the proposed Code amendment: an evaluation of the costs and benefits of the proposed Code amendment: an evaluation of alternative means of achieving the ob- jectives of the proposed amendment.
(b) (c) 25 (3) Despite subsection (1), the Authority need not comply 30 with subsection (1)(b) or (c) if it is satisfied on reasonable grounds that— (a) the nature of the amendment is technical and non-con- troversial; or there is widespread support for the amendment among 35 the people likely to be affected by it; or (b) 34 Electricity Industry Bill Part 2 cl 45 (c) there has been adequate prior consultation (for instance, by or through an advisory group) so that all relevant views have been considered.
Urgent amendments to Code The Authority may amend the Code without complying with 5 section 42(1) if— (a) the Authority considers that it is necessary or desirable in the public interest that the proposed amendment be made urgently; and along with the notice of the amendment that is pub- 10 lished in the Gazette under section 41(3)(b), the Au- thority publishes a statement of the reasons why the ur- gent amendment is needed.
(b) Every amendment made under this section— (a) comes into force on the date specified in the Gazette 15 notice (despite section 41(4)), which may be any day after the date of that notice; and expires on the date that is 9 months after the date on which it comes into force.
(b) Compare: 1992 No 122 s 172E(3) Authority to publish consultation charter The Authority must develop, issue, and make publicly avail- able a consultation charter that includes guidelines, not incon- sistent with this Act, relating to the processes for amending the Code and consulting on proposed amendments.
43 (1) (2) 44 (1) (2) However, no amendment to the Code is invalid merely be- cause— (a) (b) there was no consultation charter at the time the amend- ment was consulted on or made; or the Authority failed to comply with the charter.
Specific new matters in Code 45 (1) Specific new matters to be in Code Before the date that is 1 year after this section comes into force, the Authority must either— 35 20 25 30 Part 2 cl 45 Electricity Industry Bill (a) (b) have amended the Code so that it includes all the matters described in subsection (2) (the new matters); or to the extent that the Code does not include all the new matters, have delivered to the Minister a report de- scribed in subsection (3).
5 (2) The new matters are as follows: (a) (b) provision of compensation by retailers to consumers during public conservation campaigns: imposing a floor or floors on spot prices for electricity in the wholesale market during supply emergencies (in- 10 cluding public conservation campaigns): (c) mechanisms to help wholesale market participants hedge against manage price risks caused by constraints on the national grid: (e) (e) (d) mechanisms to allow participants who buy electricity 15 on the wholesale market (called the demand side) (commonly called the demand side) to benefit from demand reductions: requirements for distributors to use more standardised line distribution tariff structures and use-of-system 20 rules: requirements for distributors that do not send accounts to consumers directly to use more standardised tariff structures: requirements for all distributors to use more stan- 25 dardised use-of-system agreements, and for those use-of-system agreements to include provisions in- demnifying retailers in respect of liability under the Consumer Guarantees Act 1993 for breaches of ac- ceptable quality of supply, where those breaches were 30 caused by faults on a distributor’s network: facilitating, or providing for, an active market for trad- ing financial hedge contracts for electricity.
(ea) (f) (3) A report provided under subsection (1)(b) must— (a) (b) identify which new matters are not included in the 35 Code; and explain why the Authority has not amended the Code to include those matters; and 36 Electricity Industry Bill Part 2 cl 47 (c) (d) suggest alternative methods by which the matters are or may be provided for; and set out if, when, and how the Authority proposes to provide for the matters.
46 Minister may amend Code to include new matters (1) The Minister may amend the Code by including provisions for any of the new matters identified in section 45(2) if— (a) 5 the Minister considers that the Code’s provisions for a new matter are not satisfactory; or the Minister considers that, in light of the Authority’s 10 report given under section 45(1)(b), it is necessary or desirable for the Minister to amend the Code to include provisions for the matter in the Code.
(b) (2) (3) (3) (4) The Minister may amend the Code as if he or she were the Authority, and sections 40 to 43 apply accordingly.

Before amending the Code, the Minister must consult with the Authority.

Before amending the Code, the Minister must— (a) consult with the Authority (in addition to any consult- ation required under section 42); and be satisfied that the amendments will achieve the Au- thority’s objective in section 17.
(b) The power given by this section may not be exercised earlier than 1 year before after, and not more than 4 3 years after, the date on which this section comes into force.

Other specific content 15 20 25 Transmission agreements 47 (1) Without limiting section 35, the Code may require Trans- power and 1 or more industry participants to enter into 1 or more agreements for connection to, use of, and (where rele- 30 vant) investment in, the national grid (a transmission agree- ment).
The terms of transmission agreements may be prescribed in the Code.

The Code may prescribe default terms and conditions that are 35 deemed to be included in transmission agreements.

(2) (2) 37 Part 2 cl 47A Electricity Industry Bill (2A) The parties to a transmission agreement may, by mutual con- sent, agree to modify any default terms and conditions, but only if and to the extent that the Code permits those terms and conditions to be modified.
(2B) Every transmission agreement between Transpower and an 5 industry participant is deemed to include a provision under which the industry participant agrees to pay Transpower any amounts that Transpower charges the industry participant in accordance with the transmission pricing methodology.

(4) (3) A transmission agreement is binding on both parties and en- 10 forceable as if it were a contract between the parties that had been freely and voluntarily entered into.
If the parties do not comply with a requirement in the Code to enter into 1 or more transmission agreements, the default terms and conditions prescribed in the Code, and the provision in 15 subsection (2B), are binding on both parties and enforceable as if they were set out in a transmission agreement.

The terms may be amended or replaced, but only by mutual consent of the parties.
The procedures for resolving disputes about transmission 20 agreements between the parties to those agreements must be set out in the Code.
Compare: 1992 No 122 s 172KA (5) (6) Subpart 4—Monitoring and enforcing Code enforcement Authority’s powers and procedures 47A Purposes of exercise of Authority’s monitoring, investigation, and enforcement powers The purposes for which the powers in section 47B may be exercised are as follows: carrying out (a) which are to— (i) the Authority’s monitoring functions, monitor compliance with this Act (including Part 3), the regulations, and the Code; and undertake and monitor the operation and effect- 35 iveness of market-facilitation measures under section 18(1)(f); and (ii) 38 25 30 Electricity Industry Bill Part 2 cl 47B (b) (iii) undertake industry and market monitoring, and carry out any other function referred to in sec- tion 18(1)(g): carrying out the Authority’s function of investigating breaches or possible breaches of, and enforcing com- 5 pliance with, this Part, Part 4, the regulations, and the Code.
Compare: 1992 No 122 s 172KB 47B Authority’s monitoring, investigation, and enforcement (1) (2) powers The Authority may exercise the powers in this section only for a purpose described in section 47A.
The Authority may require an industry participant to do any of the following: (a) 10 its officers or employees to be interviewed 20 provide, within any reasonable time specified by the 15 Authority, any information, papers, recordings, and documents that are in the possession, or under the control, of the participant and that are requested for the purpose: permit (which interview may be recorded) and ensure as far as possible that they are made available for interview and answer truthfully and fully any questions put to them: give all other assistance that may be reasonable and ne- cessary to enable the Authority to carry out its functions 25 and exercise its powers.
(b) (c) (4) (3) Nothing in this section requires a person to give the Authority access to any premises, except for a purpose described in sec- tion 47A(b) and under a warrant issued under section 47C.

If an industry participant, whether directly or through an of- 30 ficer or employee, fails to comply with a requirement of the Authority under this section, the failure is treated as if it were a breach of the Code and the Authority may apply to the Rul- ings Panel for any order under section 56.
Compare: 1992 No 122 s 172KB 35 39 Part 2 cl 47C Electricity Industry Bill 47C Power to search (1) The Authority may, for a purpose specified in section 47A(b), authorise an employee of the Authority (an authorised per- son) to search, under a warrant issued under subsection (2), any place named in the warrant for the purpose of ascertaining 5 whether an industry participant has breached, or may breach, this Part, Part 4, the regulations, or the Code.
(2) 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 10 the purpose of ascertaining whether an industry participant has breached, or may breach, this Part, Part 4, the regulations, or the Code, for an authorised person to search any place may, by warrant, authorise that person to search a place specified in the warrant.
Sections 98B to 98F of the Commerce Act 1986 apply in rela- tion to a search under this section as if— (a) (3) 15 references in those sections to a warrant issued under section 98A of the Commerce Act 1986 were references to a warrant issued under subsection (2) of this sec- 20 tion; and references to the Commission were references to the Authority.
(b) Compare: 1992 No 122 s 172KD; 1986 No 5 s 98A 47D Privileges protected (1) Nothing in section 47B limits any claim for legal profes- 25 (2) sional privilege.
If the Authority requires an industry participant to do anything referred to in section 47B, neither the industry participant nor any officer or employee of the industry participant is excused 30 from answering a question or giving any information or docu- ment on the ground that to do so may incriminate or tend to incriminate the industry participant or the officer or employee.
(3) However, any self-incriminating statement or document made or given by an officer or employee, or an industry participant 35 that is an individual, is not admissible as evidence in any crim- inal or civil proceedings against that person.
Compare: 1992 No 122 s 172KC 40 Electricity Industry Bill Part 2 cl 47E 47E Authority may suspend trading in case of insolvency (1) This section applies to a generator or purchaser that— (a) (b) is unable to pay its debts; or calls a meeting for the purpose of Part 14 of the Com- panies Act 1993; or is adjudicated bankrupt; or in the case of a company, society, or partnership, has a receiver or statutory manager or similar person ap- pointed in respect of it or of all or any of its assets; or is put into liquidation.
(c) (d) (e) (2) A generator or purchaser is adjudicated bankrupt if,— (a) (b) in the case of a partnership, all of the partners are adju- dicated bankrupt; or in the case of an individual, that individual is adjudi- cated bankrupt.

The Authority may suspend the generator’s or purchaser’s rights to make bids or offers under the Code, with effect from a time to be determined by the Authority, which must be time later than the relevant event under subsection (1).
(3) 5 10 15 (4) Despite any suspension of trading ordered by the Authority, 20 the generator or purchaser must continue to meet its common quality obligations under the Code, to the extent that the sus- pension order permits.
(5) After a suspension order under this section takes effect,— (a) (b) (c) the Authority may order that any rights that were sus- 25 pended be reinstated in respect of the generator or pur- chaser; and the Authority may apply to the Rulings Panel for a ter- mination order in respect of the generator or purchaser; and the generator or purchaser may apply to the Rulings Panel to review the suspension by the Authority; and the Rulings Panel may, on review, exercise all the powers that the Authority has under subsection (3) and para- graph (a) of this subsection.
35 30 Compare: SR 2003/374 rr 143, 144, 145 41 Part 2 cl 48 Electricity Industry Bill Investigation of complaints: procedure in regulations The Authority may monitor compliance with the Code by industry participants and must investigate complaints of breaches of the Code.
The Authority’s procedures relating to monitoring compliance 5 with the Code, and investigating and taking enforcement ac- tion against breaches or possible breaches of the Code, are set out in sections 51 to 54 and regulations made under sec- tion 119.

Code enforcement 10 Complaints, appeals, and disputes Complaints about breaches or possible breaches of the Code must be made to the Authority at first instance.

The Authority must deal with complaints in accordance with this Part and the regulations.
Complaints may subsequently be referred to the Rulings Panel, in accordance with this Part and the regulations, by either the Authority or an industry participant.

The Rulings Panel may hear and determine appeals against certain decisions, identified in the regulations or the Code, that 20 were made under the Code.

The Rulings Panel may consider and resolve certain disputes, identified in the regulations or the Code, that are between in- dustry participants and relate to the Code.
15 Interim injunctions The Authority may at any time apply to the High Court for the grant of an interim injunction— (a) restraining an industry participant from doing anything that is in breach of the Code; or requiring an industry participant to do something in ac- 30 cordance with the Code.

(b) 25 The court may grant the injunction if, in the opinion of the court, it is desirable to do so.
Subsection (2) applies, in the case of an injunction under subsection (1)(a),— 35 48 (1) (2) 48 (1) (2) (3) (4) (5) 49 (1) (2) (3) 42 Electricity Industry Bill Part 2 cl 50 (a) whether or not the participant has done, or omitted to do, that thing; and (b) whether or not there is an imminent danger of substan- tial damage to any person if the participant does, or omits to do, that thing.
5 The court may rescind or vary the injunction on application by the Authority or any participant affected by the injunction.

The court must not require the Authority, as a condition of granting an interim injunction, to give an undertaking as to damages, and must not, when determining the application, 10 take into account the fact that the Authority is not required to give such an undertaking.
(4) (5) (6) Nothing in this Act or the regulations made under section 119 prevents the Authority from seeking an interim injunction under this section at any time.
Compare: SR 2003/374 r 68 15 50 (1) Authority may suspend trading in case of insolvency This section applies if any generator or purchaser— (a) (b) is unable to pay its debts; or calls a meeting for the purpose of Part 14 of the Com- 20 panies Act 1993; or is adjudicated bankrupt; or in the case of a company, society, or partnership, has a receiver or statutory manager or similar person ap- pointed in respect of it or of all or any of its assets; or is put into liquidation.
(c) (d) (e) 25 (2) A generator or purchaser is adjudicated bankrupt if,— (a) (b) in the case of a partnership, all of the partners are adju- dicated bankrupt; or in the case of an individual, that individual is adjudi- 30 cated bankrupt.

If this section applies, the Authority may suspend all rights to make bids or offers under the Code, with effect from a time to be determined by the Authority, which must be a time later than the relevant event under subsection (1).
35 (3) (4) Despite any suspension of trading ordered by the Authority, every generator and purchaser must continue to meet its com- 43 Part 2 cl 51 Electricity Industry Bill mon quality obligations under the Code, to the extent that the suspension order permits.
(5) After a suspension order under this section takes effect,— (a) (b) (c) the Authority may order that any rights that were sus- pended be reinstated in respect of the generator or pur- 5 chaser; and the Authority may apply to the Rulings Panel for a ter- mination order in respect of the generator or purchaser; and the generator or purchaser may apply to the Rulings 10 Panel to review the suspension by the Authority; and the Rulings Panel may, on review, exercise all the powers that the Authority has under subsection (3) and para- graph (a) of this subsection.
Compare: SR 2003/374 rr 143, 144, 145 15 20 Investigative powers The Authority may exercise the powers in this section only for the purpose of, or associated with, monitoring compliance with the Code, and investigating and taking enforcement ac- tion against breaches or possible breaches of the Code.
For the purposes in subsection (1), the Authority may require an industry participant to do any of the following: (a) provide, within any reasonable time specified by the Authority, any information, papers, recordings, and documents that are in the possession, or under the 25 control, of the participant and that are requested for the purpose: permit its officers or employees to be interviewed (which interview may be recorded) and ensure as far as possible that they are made available for interview and 30 answer truthfully and fully any questions put to them: give to the Authority, or any person authorised by the Authority, at all reasonable times, full access to any premises (subject to complying with any safety require- ments that apply to visitors to those premises) at which 35 the participant carries on business or maintains records: (b) (c) 51 (1) (2) 44 Electricity Industry Bill Part 2 cl 52 (d) give all other assistance that may be reasonable and ne- cessary to enable the Authority to carry out its functions and exercise its powers.
If an industry participant, whether directly or through an of- ficer or employee, fails to comply with a requirement of the 5 Authority under this section, the failure is treated as if it were a breach of the Code and the Authority may apply to the Rul- ings Panel for any order under section 56.
Compare: 1992 No 122 s 172KB Persons authorised by Authority The Authority may authorise, in writing, any person or persons to exercise all or any of the powers referred to in section 51(2)(b) or (c) in respect of an industry participant.

10 (3) 52 (1) (2) An authorised person must, before entering premises under section 51(2)(c), give reasonable notice to the owner or oc- 15 cupier of the premises (at least 4 days before entry) of his or her intention to enter the premises.
(4) (3) An authorised person must, on first entering any premises under section 51(2)(c) and, if requested, at any later time, produce to the person apparently in charge of the premises the 20 authorisation under subsection (1).
If an authorised person enters any premises under section 51(2)(c) and is unable, despite reasonable efforts, to find any person apparently in charge, the authorised person must, be- fore leaving the premises, leave a written notice stating— (a) (b) the authorised person’s identity; and the address of the premises where the authorised person may be contacted; and the date and time of entry; and the reasons for entering.
(c) (d) Section 51(2)(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.

(5) 25 (6) An authorised person may apply for a warrant by written ap- plication on oath.
(7) A District Court Judge, Justice, or Community Magistrate, or a Court Registrar (not being a constable) who is satisfied that 45 30 35 Part 2 cl 53 Electricity Industry Bill there are reasonable grounds to believe that it is necessary, for the purpose of ascertaining whether or not an industry partici- pant has breached, or may breach, the Code, for an authorised person to search any place may, by warrant, authorise that per- son to search a place specified in the warrant.
Compare: 1992 No 122 s 172KD 5 53 (1) Privileges protected Section 51 does not limit any claim for legal professional privilege.

(2) A person is not excused from complying with section 51 by 10 answering a question or giving any information or document on the ground that to do so may incriminate or tend to incrim- inate that person.
(3) However, a self-incriminating statement or document made or given— (a) is not admissible as evidence in criminal or civil pro- ceedings against that person; and 15 (b) may not be used against the person in any proceedings before the Rulings Panel, unless the information is pro- vided under any self-reporting obligation specified in 20 the Code.
Compare: 1992 No 122 s 172KC 54 (1) Limitation periods for breaches of Code The Authority may not exercise its powers in relation to a breach or an alleged possible breach of the Code if the 25 breach— (a) was discovered, or ought reasonably to have been dis- covered, more than 3 years before the exercise of the power; or occurred more than 10 years before the exercise of the 30 power.
(b) (2) However, once the Authority has exercised a power in rela- tion to the breach or alleged possible breach, the limitations in subsection (1) do not apply.
Compare: SR 2003/374 r 5(2) 35 46 Electricity Industry Bill Part 2 cl 55 Rulings Panel’s powers and procedures 5 (b) 55 (1) Bringing complaints and disputes to Rulings Panel The Authority may refer to the Rulings Panel, in accordance with regulations made under section 119, any of the follow- ing: (a) a complaint about a breach or alleged breach of the Code by an industry participant: a complaint that an industry participant has breached the regulations made under section 119: a complaint that an industry participant has failed to 10 comply with an order of the Rulings Panel, other than an order the breach of which is an offence.
(2) An industry participant may refer to the Rulings Panel, in ac- cordance with regulations made under section 119, any of the following: (a) (c) 15 a complaint about a breach or alleged breach of the Code by another industry participant: a dispute with another industry participant about a mat- ter dealt with in the Code.
(b) (3) 55 (1) (2) (3) The procedures of the Rulings Panel for considering and de- 20 termining complaints and disputes are set out in this subpart and regulations made under section 119.

Compare: SR 2003/374 r 161 Powers and procedures of Rulings Panel Every complaint, appeal, or dispute before the Rulings Panel 25 must be dealt with by a panel of 3 members, one of whom must be the chairperson (except when the deputy chairperson acts on his or her behalf).
Subject to this Act and the regulations, and the requirements of natural justice, the Rulings Panel may determine its own 30 procedures.

The Rulings Panel has all the powers necessary to perform its functions in accordance with the Act and the regulations.
Compare: SR 2003/374 rr 96, 177 47 Part 2 cl 56 Electricity Industry Bill 56 Remedies and orders of Rulings PanelRemedial orders for breach of Code (1) On determining a complaint that an industry participant has breached the Code, regulations made under section 119, or an order of the Rulings Panel, the Rulings Panel may decide 5 that no action should be taken, or do any 1 or more of the following: (a) issue a private warning or reprimand to an industry par- ticipant: issue make an order that a public warning or reprimand 10 be issued to an industry participant: impose additional or more stringent record-keeping or reporting requirements under or in connection with the Code: (b) (c) (d) make a pecuniary penalty order requiring an industry 15 participant to pay a pecuniary penalty to the Crown of an amount not exceeding $2 million $200,000 (see sec- tion 58): (e) make a compensation order requiring an industry par- (f) ticipant to pay a sum by way of compensation to any 20 other person: make a compliance order requiring an industry partici- pant that is found not to be complying with the Code to take any action that is necessary to restore it to a pos- ition of compliance (see section 59): 25 (g) make orders regarding the reasonable costs of any in- (h) (i) vestigations or proceedings: recommend to the Authority that a change should be made to the Code or the regulations: recommend to the Minister that a change should be 30 made to the regulations or the Act.
(2) The Rulings Panel must take into account its own previous decisions in respect of any similar situations previously dealt with by the Authority or any predecessor of the Authority.

Compare: 1992 No 122 s 172KE 35 48 Electricity Industry Bill Part 2 cl 58 57 (1) Restrictions on remedies The remedies that the Rulings Panel may impose under sec- tion 56 are the only remedies in respect of a breach of the Code.
(2) No one may bring an action for breach of statutory duty that 5 arises out of, or relates to, a breach of the Code.
(3) No industry participant may bring an action in tort against the system operator a market operation service provider that arises out of, or relates to, any act, matter, or thing done, or required or omitted to be done, by the system operator in its role as 10 system operator, or by the market operation service provider in the course of it providing market operation services, provided that the act or omission is not a fraudulent act or omission by the system operator market operation service provider.
This Except as provided in subsection (3), nothing in this 15 section does not limit limits the recovery of— (a) (4) a debt owing under any regulations made under section 119 order of the Rulings Panel made under this Act; or damages in tort other than breach of statutory duty; or damages for breach of contract, or for any other wrong, 20 that arises from an act or omission that is also a breach of the Code.
(b) (c) Compare: 1992 No 122 ss 172KF, 172KG 58 (1) (2) Pecuniary penalty orders The Rulings Panel may make a pecuniary penalty order under 25 section 56(1)(d) only on an application by the Authority.
In determining the amount of whether to make a pecuniary penalty order and, if so, the amount of the order, the Rulings Panel must seek to set an amount that is commensurate with consider the seriousness of the breach of the Code, having re- 30 gard to the following: (a) (b) (c) the severity of the breach: the impact of the breach on other industry participants: the extent to which the breach was inadvertent, negli- gent, deliberate, or otherwise: the circumstances in which the breach occurred: any previous breach of the regulations or the Code by the industry participant: (d) (e) 35 49 Part 2 cl 59 Electricity Industry Bill (f) (g) (h) (i) whether the industry participant disclosed the matter to the Authority: the length of time the breach remained unresolved: the participant’s actions on learning of the breach: any benefit that the participant obtained, or expected to 5 obtain, as a result of the breach: any other matters that the Rulings Panel thinks fit.
(j) Compare: SR 2003/374 r 109 59 60 Offence to breach compliance certain orders of Rulings Panel An industry participant that breaches a compliance order made under section 56(1)(f), or a record-keeping order made under section 56(1)(c), commits an offence, and is liable on sum- mary conviction to a fine not exceeding $20,000, who breaches a compliance order made under section 56(1)(f).
Compare: SR 2003/374 r 108 Suspension and termination for breach of certain Rulings Panel orders The Rulings Panel may make a suspension order or a termin- ation order against an industry participant if— (a) the industry participant has failed to comply with an order of the Rulings Panel, and the failure has seriously prejudiced the operational or financial security of the wholesale market or transmission system for electricity; or the Authority has suspended trading in a generator or purchaser under section 49 47E and applies to the Rul- ings Panel for a termination order.
(b) 10 15 20 25 (2) The Rulings Panel may at any time extend, suspend, or modify any conditions of any suspension order made by the Rulings 30 Panel.

Compare: SR 2003/374 r 138 Effect of suspension and termination orders 61 (1) A suspension order suspends the all or specified rights under the Code of the industry participant against whom it is made, 35 50 Electricity Industry Bill Part 2 cl 62B subject to any conditions set out in the order, and for the period specified in the order.
(2) A termination order terminates all or specified rights under the Code of the industry participant against whom it is made.

(3) A termination order does not affect any liability for payment 5 of money under the Code before the date of the relevant order.
Compare: SR 2003/374 rr 138(1), 146(2), (3) 62 Offences relating to suspension and termination orders An industry participant commits an offence, and is liable on summary conviction to a fine not exceeding $20,000, if it fails 10 to comply with— (a) (b) a suspension order or a termination order; or any direction or arrangement made by the Rulings Panel under the regulations made under section 119 in rela- tion to a suspension order or a termination order.
Compare: SR 2003/374 r 139 62A Rulings Panel powers relating to appeals (1) At the conclusion of an appeal against a decision made under the Code, the Rulings Panel may— (a) (b) confirm, modify, or reverse the decision; or refer the decision back to the original decision-maker, with or without directions relating to the reconsider- ation.

15 20 (2) A decision that is appealed against remains in force until the appeal is determined, unless the Rulings Panel orders other- 25 wise.
62B Rulings Panel powers relating to disputes Following consideration of a dispute between industry partici- pants in accordance with the regulations, the Rulings Panel may make under this section any order that it determines is 30 just and reasonable in the circumstances, including— (a) an order requiring 1 or more parties to the dispute to take any action, including paying money to any other party, or refrain from taking any action, that the Rulings Panel specifies; and 35 51 Part 2 cl 63 Electricity Industry Bill (b) an order, having assessed damages against any party, awarding compensation to be paid to the party.
Compare: SR 2003/374 r 156 Orders generally Every order of the Rulings Panel under section 56, 60, or 5 62B— (a) must be in writing; and (b) is subject to this subpart and any regulations made under section 119 that limit or restrict the amount of liability under an order or cumulative orders; and 10 (c) may be amended or revoked at any time by the Rulings Panel.
Appeals Appeal on ground of lack of jurisdiction An industry participant that is affected by a decision of the 15 Rulings Panel may appeal that decision to the High Court on the ground of lack of jurisdiction.

Compare: 1992 No 122 s 172KH Appeal on question of law There is a right of appeal to the High Court, on a question of 20 law only, against any decision of the Authority or the Rulings Panel.
Compare: 1992 No 122 s 172KJ Appeal against certain orders of Rulings Panel The Authority or an industry participant may appeal to the 25 High Court against the amount ordered by the Rulings Panel to be paid under— (a) (b) The Authority or an industry participant may appeal to the 30 High Court against the following orders made by the Rulings Panel: (a) a pecuniary penalty order; or a compensation order.
an order requiring a public warning or reprimand to be issued (section 56(1)(b)): 63 64 65 66 (1) (1) 52 Electricity Industry Bill Part 2 cl 69 (b) (c) (d) (e) a pecuniary penalty order, or the amount payable under a pecuniary penalty order (section 56(1)(d)): a compensation order, or the amount payable under a compensation order (section 56(1)(e)): a compliance order (section 56(1)(f)): an order made under section 62B.
5 (2) An industry participant may appeal to the High Court against a suspension order or termination order made by the Rulings Panel.

(3) An industry participant may exercise a right of appeal under 10 this section only if the participant is— (a) an industry participant in whose favour or against whom the order of the Rulings Panel is made; or an industry participant who joined or was joined as a party to the proceeding that is the subject to of the ap- 15 peal.
(b) 67 68 Compare: 1992 No 122 ss 172KK, 172KL How and when appeals made An appeal under this Part must be made by giving notice of appeal within 20 working days after the date of the decision or 20 order appealed against or within any further time that the High Court allows.
Compare: 1992 No 122 s 172KJ(2) Determination of appeals In determining an appeal under section 66, the High Court 25 may do any 1 or more of the following things: (a) confirm, modify, or reverse the decision or order, or any part of it: exercise any of the powers that could have been exer- cised by the Rulings Panel in relation to the matter to 30 which the appeal relates.
Compare: 1986 No 5 s 93; 1992 No 122 s 172KM (b) 69 (1) High Court may refer appeals back for reconsideration The High Court may, instead of determining an appeal, direct the Rulings Panel to reconsider, either generally or in respect 35 53 Part 2 cl 70 Electricity Industry Bill (2) (3) 70 71 (1) (2) of any specified matters, the whole or any specified part of the matter to which the appeal relates.
In giving any direction under this section, the court must— (a) (b) advise the Rulings Panel of its reasons for doing so; and give to the Rulings Panel any directions that it thinks 5 just concerning the reconsideration or otherwise of the whole or any part of the matter that is referred back.

In reconsidering the matter, the Rulings Panel must have re- gard to the court’s reasons for giving the direction, and the court’s directions.
Compare: 1986 No 5 s 94; 1992 No 122 s 172KN 10 Provisions pending determination of appeal If an appeal is brought against any decision or order of the Rul- ings Panel, the decision or order remains in full force pending the determination of the appeal, unless the High Court orders 15 to the contrary.
Compare: 1986 No 5 s 95; 1992 No 122 s 172KO High Court may order proceedings be heard in private The High Court may, in its discretion, order that the hearing or any part of the hearing of any appeal under this Part be held 20 in private.

The High Court may make an order prohibiting the publication of any report or description of a proceeding or any part of a proceeding (whether heard in public or in private), but no order may prohibit the publication of any determination of the court.
25 Compare: 1986 No 5 s 96; 1992 No 122 s 172KP Appeal to Court of Appeal in certain cases 72 (1) Any party to any an appeal before the High Court against a decision or order of the Rulings Panel under this Part who is dissatisfied with a decision or order of the High Court, may, 30 with the leave of the High Court or of the Court of Appeal, appeal to the Court of Appeal.

Section 66 of the Judicature Act 1908 applies to the appeal.
(2) 54 (3) (4) 73 74 (1) Electricity Industry Bill Part 3 cl 74 In determining whether to grant leave to appeal under this sec- tion, 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 in- volved: the importance of the issues to the parties: the amount of money in issue: any other matters that in the particular circumstances the court thinks fit.
(b) (c) (d) 5 The court granting leave may, in its discretion, impose any 10 conditions that it thinks fit, whether as to costs or otherwise.

Compare: 1986 No 5 s 97; 1992 No 122 s 172KQ Judicial review not precluded Nothing in this Part limits access to the courts in an action for judicial review.
Compare: 1992 No 122 s 172KI; SR 2003/374 r 185 Part 3 Separation of distribution from certain generation and retailing Subpart 1—Separation of distribution from certain generation and retailing Purpose and outline of Part Purpose and outline of this Part The purpose of this Part is to promote competition in the elec- tricity industry— (a) by prohibiting a person who is involved in a distributor from being involved in a generator where that may cre- ate incentives and opportunities to inhibit competition in the electricity industry; and by restricting relationships between a distributor and a 30 generator or a retailer, where those relationships may not otherwise be at arm’s length.
(b) 15 20 25 (2) In general terms, this Part imposes rules in respect of distribu- tors as follows: 55 Part 3 cl 75 Electricity Industry Bill (a) (b) (c) (d) (e) ownership separation, if a person is involved both in a distributor and in a generator with more than 100 250 MW of generation directly connected to the national grid: corporate separation and arm’s-length rules, if a person 5 is involved both in a distributor and in either or both of— (i) a generator that generates more than 10 50 MW of generation connected to the distributor’s net- work: a retailer that retails more than 5 75 GWh per year to customers connected to the distributor’s network: (ii) 10 use-of-systems agreement rules, if a connected retailer retails more than 5 GWh per year to customers con- 15 nected to the distributor’s local network: rules preventing persons involved in distributors from paying retailers in respect of the transfer of the retailer’s retail customers: no-discrimination rules that apply when distributors, or 20 electricity trusts or customer co-operatives involved in distributors, pay dividends or rebates.
Subsection (2) is intended only as a guide to the general scheme and effect of this Part.
Compare: 1998 No 88 s 2(2) 25 Interpretation of Part Interpretation in this Part In this Part and Schedules 2 and 3, unless the context other- wise requires,— arm’s-length rules means the objective and rules set out in 30 Schedule 3 assets includes property of any kind, whether tangible or intan- gible, and includes rights, interests, and claims of every kind however they arise associate has the meaning given in clause 8 of Schedule 2 35 business means any undertaking that is carried on whether for gain or reward or not (3) 75 56 Electricity Industry Bill Part 3 cl 76 connected generator has the meaning given in section 78(3) connected retailer has the meaning given in section 78(3) control right has the meaning given in clause 5 of Schedule 2 customer, in respect of a retailer, means a consumer to whom 5 that retailer sells electricity director, in relation to a body corporate, means a person occu- pying the position of director of the body corporate by what- ever name called equity return right has the meaning given in clause 6 of 10 Schedule 2 financial year means a period of 12 months ending with 31 March involved in has the meaning given in section 76 manager has the meaning given in clause 10 of Schedule 2 15 material influence has the meaning given in clause 7 of Schedule 2 nameplate means the full-load continuous rating of a gen- erating plant under specific conditions as designated by its manufacturer and measured in megawatts in accordance with 20 International Electrotechnical Commission Standard 60034-1 or any successor to that standard or any recognised equivalent standard person includes the trustees of a trust acting in that capacity rights means all rights, powers, privileges, and immunities, 25 whether actual, contingent, or prospective subsidiary has the meaning given in sections 5 and 6 of the Companies Act 1993 total capacity means the total nominal capacity of a generator in a financial year (determined according to the nameplates of 30 all of the generator’s generating plants).
76 Meaning of involved in (1) For the purposes of this Act, a person is involved in a distribu- tor, a generator, or a retailer if the person— 57 Part 3 cl 77 Electricity Industry Bill (a) (b) (c) carries on a business that does any of those things, either alone or together with its associates and either on its own or another’s behalf; or exceeds the 10% threshold in respect of a business that does any of those things; or has material influence over a business that does any of those things.
5 (2) A person exceeds the 10% threshold in respect of a business if the person— (a) (b) (c) (d) has more than 10% of the control rights in the business; 10 or has more than 10% of the equity return rights in the business; or is one of 2 or more associates who, in aggregate, have more than 10% of the control rights in the business; or is one of 2 or more associates who, in aggregate, have more than 10% of the equity return rights in the busi- ness.

15 (3) (4) Involvement has a corresponding meaning.
This section is subject to Schedule 2.

Compare: 1998 No 88 ss 7, 8 20 Ownership separation Ownership separation 77 (1) A person who is involved in a distributor must not be involved in a generator that has 1 or more generators that have a total 25 capacity of more than 100 250 MW that is generated by 1 or more generating plants that are directly connected to the national grid.

To avoid doubt, generation connected to a distribution network is not directly connected to the national grid.
Compare: 1998 No 88 s 17 30 (2) 58 78 (1) (2) (3) Electricity Industry Bill Part 3 cl 79 Corporate separation and arm’s-length rules Corporation separation and arm’s-length rules applying to distributors and connected generators and connected retailers The person or persons who carry on the business of distribu- 5 tion must carry on that business in a different company from the company that carries on the business of a connected gen- erator or a connected retailer.
Every person who is involved in a distributor, and every per- son who is involved in a connected generator or a connected 10 retailer, must comply, and ensure that the person’s businesses comply, with the arm’s-length rules.
In this Part section, unless the context otherwise requires,— connected generator, in relation to a distributor, means a gen- erator— (a) 15 that has a total capacity of more than 10 50 MW of generation that is connected to any of the distributor’s networks; and in respect of which the distributor, or any other person involved in the distributor, is involved (b) connected retailer, in relation to a distributor, means a re- tailer— (a) that is involved in retailing more than 5 75 GWh of electricity in a financial year to customers who are con- nected to any of the distributor’s networks; and in respect of which the distributor, or any other person involved in the distributor, is involved.
(b) 20 25 Compare: 1998 No 88 ss 17D, 17E Other rules 79 (1) Use-of-systems agreements Every director of a distributor in respect of which there is a connected retailer or a connected generator must ensure that— the distribution business has a comprehensive, written (a) use-of-systems agreement that provides for the supply of line function services and information to the con- 35 nected retailer or connected generator (as the case may be); and 30 59 Part 3 cl 79 Electricity Industry Bill (b) (c) (d) the terms of that use-of-systems agreement do not dis- criminate in favour of 1 business and do not contain ar- rangements that include elements that the business usu- ally omits, or omit elements that the business usually includes, in use-of-systems agreements with parties that 5 are— (i) connected or related only by the transaction or dealing in question; and acting independently; and (ii) (iii) each acting in its own best interests; and the business operates in accordance with that use-of- systems agreement; and the business publicises that use-of-systems agreement and provides it to the Authority.
In this section, unless the context otherwise requires,— connected generator, in relation to a distributor, means a gen- erator— (a) that has a total capacity of more than 10 MW of gen- eration that is connected to any of the distributor’s net- works; and in respect of which the distributor, or any other person involved in the distributor, is involved (b) 10 15 20 connected retailer, in relation to a distributor, means a re- tailer— (a) that is involved in retailing more than 5 GWh of electri- 25 city on the distributor’s local network in a financial year to customers who are connected to that network; and in respect of which the distributor, or any other person involved in the distributor, is involved (b) local network means a network operated by a distributor in a 30 contiguous geographic area or areas.
The directors of the distributor must ensure that there is also publicised, and provided to the Authority, a certificate signed by those directors stating whether or not, in the preceding cal- endar year,— (a) the terms in the use-of-systems agreement are a true and fair view of the terms on which line function services and information were supplied in respect of the retailing 35 (1A) (2) 60 Electricity Industry Bill Part 3 cl 80 or generating to which the agreement relates during that year; and this section was otherwise fully complied with during that year.
(b) (3) (4) Every director commits an offence who— (a) refuses or knowingly fails to comply with this section; or allows a use-of-systems agreement or a certificate to be publicised or provided to the Authority knowing that it is false or misleading in a material particular.

(b) 5 10 Every director who commits an offence under subsection (3) is liable on summary conviction to a fine not exceeding $200,000.
Compare: 1998 No 88 s 17F 80 Person involved in distributor must not pay for transfer of retail customers to connected retailers 15 (1) A A distributor, and any other person listed in subsection (2), must not pay, or offer to pay, any consideration to a retailer in respect of the transfer to a connected retailer of any or all of another retailer’s retail customers who are connected to the 20 distributor’s networks.
The persons are— (a) (2) (c) (b) the distributor or any other person involved in the dis- tributor: a connected generator in respect of the distributor or any 25 other person involved in the connected generator: a connected retailer in respect of the distributor or any other person involved in the connected retailer.

In this section, connected retailer and connected generator have the same meaning as in section 79.
To avoid doubt, subsection (1) includes a prohibition on— any agreement to acquire the assets or voting securities (a) of another retailer (regardless of whether any, or only nominal, consideration is attributed to customers) as a result of which there is a transfer of responsibility for 35 retailing electricity to customers; and 30 (2A) (3) 61 Part 3 cl 81 Electricity Industry Bill (4) 81 (1) (2) (3) (b) any consideration that is directly or indirectly or in whole or in part in respect of the transfer of any of another retailer’s customers or customer accounts.
Every person commits an offence who knowingly fails to com- ply with this section and is liable on summary conviction to a 5 fine not exceeding $500,000.

No discrimination when paying rebates or dividends This section applies if a distributor has a connected retailer.
Every person listed in subsection (3) must ensure that any rebates or dividends or other similar payments paid do not dis- 10 criminate between— (a) (b) customers of the connected retailer; and customers of other retailers where those customers are connected to the distributor’s networks.
The persons are— (a) (b) the directors of the distributor: the trustees of any customer trust or community trust that is involved in the distributor and the connected re- tailer: the directors of any customer co-operative that is in- 20 volved in the distributor and the connected retailer.

(c) 15 (3A) (4) In this section, connected retailer has the same meaning as in section 79.
Every director and trustee commits an offence who knowingly fails to comply with this section and is liable on summary con- 25 viction to a fine not exceeding $200,000.
Subpart 2—Enforcement and general provisions Enforcement and penalties for this Part Pecuniary penalties If the High Court is satisfied on the application of the Authority or any other person that a person has breached a provision of this Part, the court may order the person to pay to the Crown a pecuniary penalty that the court determines to be appropriate.
30 82 (1) 62 (2) (3) (4) (5) Electricity Industry Bill Part 3 cl 83 The amount of any pecuniary penalty must not, in the case of an individual, exceed $500,000 in respect of each act or omission.
The amount of any pecuniary penalty must not, in the case of a body corporate, exceed, in respect of each act or omission, 5 the greater of— (a) (b) $10 million; or either,— (i) if it can be readily ascertained and if the court is satisfied that the contravention occurred in the 10 course of producing a commercial gain, 3 times the value of any commercial gain resulting from the contravention; or if the commercial gain cannot be readily ascer- tained, 10% of the turnover of the body corpo- 15 rate and all of its interconnected bodies corporate (within the meaning of the Commerce Act 1986 and section 94) (if any).
(ii) In any proceedings under this section for a pecuniary penalty, the standard of proof is the standard of proof applying in civil 20 proceedings.
In determining an appropriate penalty in a civil proceeding whether to make a pecuniary penalty order and, if so, the amount of the order, the court must have regard to all relevant matters, including— (a) (b) the nature and extent of the act or omission: the nature and extent of any loss or damage suffered by any person as a result of the act or omission: the circumstances in which the act or omission took place: (c) 25 (d) whether the person has previously been found by the court in proceedings under this Part (or any predecessor to this Part) to have engaged in any similar conduct.
Compare: 1986 No 5 s 80; 1998 No 88 s 51 Injunctions 83 (1) Where it appears to the High Court, on the application of the Authority or any other person, that a person intends to engage, or is engaging, or has engaged, in conduct that constitutes or 63 30 35 Part 3 cl 84 Electricity Industry Bill (b) (c) would constitute a breach of a provision of this Part, the court, by order, may do all or any of the following things: (a) 5 grant an injunction restraining any person from engag- ing in conduct that constitutes or would constitute such a breach: impose on any person obligations to be observed in the carrying on of any business or the safeguarding of any business or any assets of any business: provide for the carrying on of any business or the safeguarding of any business or assets of any business, 10 either by the appointment of a person to conduct or supervise the conduct of any business (on such terms and with such powers as may be specified or described in the order), or in any other manner, as the court thinks necessary in the circumstances of the case.
15 In any proceedings under this section, the Authority, upon the order of the court, may obtain discovery and administer inter- rogatories.

Compare: 1986 No 5 s 84; 1998 No 88 s 52 Actions for damages Every person is liable in damages for any loss or damage caused by that person engaging in conduct that constitutes a breach of a provision of this Part.
Compare: 1986 No 5 s 82; 1998 No 88 s 53 20 25 Other powers to give directions, reopen agreements If the High Court is satisfied, on the application of the Author- ity or any other person, that a person has breached a provision of this Part, the court may give directions ordering a person in breach to renegotiate any agreement that contravenes, or gives rise to a breach of, a provision of this Part, on such terms as 30 the court specifies.
If directions under subsection (1) are not complied with to the satisfaction of the court, the court may— (a) reopen any agreement that breaches, or gives rise to a breach of, a provision of this Part and make any orders 35 it deems just and equitable for the purpose of reopening the transaction and setting aside the breach, and, if ap- (2) 84 85 (1) (2) 64 Electricity Industry Bill Part 3 cl 87 (b) propriate, reinstating the parties as nearly as may be in their former positions: give directions concerning the business or property of the person, or the management or administration of that person’s business or property (including a direction that 5 a person cease to be a manager of the business), and every person is bound by the directions.
Compare: 1998 No 88 s 56 86 Miscellaneous provisions relating to civil proceedings (1) (2) under this Part In any civil proceedings under this Part, the Authority, upon the order of the High Court, may obtain discovery and admin- ister interrogatories.

Civil proceedings under this Part may not be commenced more than 3 years after the matter giving rise to the breach arose.
10 15 (3) Where conduct by any person constitutes a breach of 2 or more provisions of this Part, civil proceedings may be instituted under this Part against that person in relation to the breach of any 1 or more of the provisions; but no person is liable to more than 1 pecuniary penalty under this Part in respect of the same 20 conduct.
Criminal proceedings under this Part may be started against a person whether or not proceedings for an order under sec- tion 82 have been started against the person for the same or substantially the same breach in respect of which the criminal 25 proceedings have been started.
(4) (5) Uncompleted proceedings for an order under section 82 must be stayed if criminal proceedings are started or have already been started against the person for the same or substantially the same breach in respect of which the order is sought.
Compare: 1986 No 5 s 80(2)–(6); 1996 No 30 s 124F; 1998 No 88 s 57 30 87 Application of Commerce Act 1986 provisions The following provisions of the Commerce Act 1986 apply for the purposes of the exercise by the Authority and the High Court of their jurisdiction and powers under this Part as if the 35 Authority were the Commerce Commission, as if references to 65 Part 3 cl 88 Electricity Industry Bill provisions of the Commerce Act 1986 were references to cor- responding provisions of this Part of this Act, and with other necessary modifications: (a) sections 77 and 78 (lay members) as if references to “this Part” were references to this Part of this Act: section 79 (evidence not otherwise admissible): section 88 (general provisions relating to granting of injunctions): section 88A (when undertaking as to damages not re- quired by Authority): section 89 (other orders): section 90 (conduct by servants or agents): Part 7 (except sections 98H, 99A, and 104, 104, 105, 106, 108, 110, and 111).
(b) (c) (d) (e) (f) (g) Compare: 1998 No 88 s 58 5 10 15 Additional proceedings Proceedings brought under this Part are in addition to any pro- ceedings brought under any other Act.

Compare: 1998 No 88 s 59 Territorial application of this Part 20 Application to persons outside New Zealand This Part extends to the acquisition or having of interests in electricity businesses in New Zealand by persons outside New Zealand.
This Part extends to persons outside New Zealand who are 25 involved in a distributor, generator, or retailer in New Zealand.
Compare: 1986 No 5 s 4(3); 1998 No 88 s 15 Disclosure and reporting to Authority Disclosure of information to Authority Every distributor that is involved in a retailer that sells elec- 30 tricity to customers who are connected to the distributor’s net- work must provide to the Authority, as soon as practicable after the end of each financial year, a statement that— (a) sets out how much electricity the retailer supplied to those customers during that financial year; and 35 88 89 90 (1) 66 Electricity Industry Bill Part 3 cl 91 (b) includes a certificate, signed by the directors of the re- tailer, stating whether or not the quantity of electricity the retailer sold to those customers during that financial year exceeded 5 GWh.
(1) Each director of a distributor referred to in section 79(1A) 5 (use-of-system agreements) must ensure that the distributor discloses the quantity of electricity sold each financial year by connected retailers to customers who are connected to its local network (within the meanings of that section).

(1A) The disclosure must be made in a statement to the Authority 10 (2) (3) (4) (5) (6) 91 (1) (2) (3) within 2 months after the end of the financial year.
The statement must be in the form prescribed by the Authority from time to time.

The statement must be audited by an independent chartered accountant.

The statement must be publicised by the Authority and the distributor.

Every person director commits an offence who— (a) refuses or knowingly fails to provide the statement to the Authority comply with this section; or provides the statement to the Authority knowing that it is false or misleading in a material particular.
(b) Every person director who commits an offence under subsec- tion (5) is liable on summary conviction to a fine not exceed- ing $200,000.

Compare: 1998 No 88 s 70A 15 20 25 Directors must report compliance with arm’s-length rules Each director of a business to which the arm’s-length rules apply must provide to the Authority, no later than 31 March in each year, a statement confirming whether or not the dir- 30 ector has complied with all of the arm’s-length rules during the preceding calendar year.
The directors and the Authority must ensure that the statement is publicised.

Every director commits an offence who— (a) refuses or knowingly fails to provide the statement to the Authority comply with this section; or 35 67 Part 3 cl 92 Electricity Industry Bill (b) provides the statement to the Authority knowing that it is false or misleading in a material particular.

Every person who commits an offence under subsection (3) is liable on summary conviction to a fine not exceeding $200,000.
Compare: 1998 No 88 s 70B 5 Exemptions Exemptions The Authority may, by notice in the Gazette, exempt— (a) any business or involvement from the application of this 10 Part; or any person from compliance with any provisions of this Part.
(b) The Authority may grant an exemption only if it is satisfied that— (a) the exemption will either promote, or not inhibit, com- petition in the electricity industry; and the exemption will not permit an involvement in a dis- tributor and a generator or a retailer that may create in- centives and opportunities to inhibit competition in the 20 electricity industry.

(b) 15 The exemption takes effect from the date specified in the ex- emption (which may not be earlier than the date of the Gazette notice).
The Authority may grant an exemption on any terms and con- 25 ditions that it reasonably considers are necessary to give effect to the purpose of this Part.

The Authority may in like manner vary or revoke any such exemption.

The Authority must make publicly available a list of all current 30 exemptions under this section.
(4) 92 (1) (2) (3) (4) (5) (6) (7) An exemption under this section is not a regulation for the purposes of the Regulations (Disallowance) Act 1989 or the Acts and Regulations Publication Act 1989.

Compare: 1998 No 88 s 81 35 68 Electricity Industry Bill Part 3 cl 96 93 94 (1) (2) Application of other Acts Application of Commerce Act 1986 Except as provided in section 94, nothing in this Part over- rides or limits the provisions of the Commerce Act 1986.
Compare: 1998 No 88 s 82 5 Not interconnected under Commerce Act 1986 For the purposes of Part 2 of the Commerce Act 1986, busi- nesses to which section 78 (corporate separation and arm’s- length rules) applies are deemed to be separate bodies corpo- rate that are not interconnected, despite the fact that they may 10 have a common owner.

Subsection (1) applies despite section 2(7) of the Commerce Act 1986.
Compare: 1998 No 88 s 83 Illegal Contracts Act 1970 95 (1) An agreement lawfully entered into does not become illegal or unenforceable by any party by reason of the fact that its performance is in breach of a provision of this Part.
15 (2) An agreement entered into in breach of a provision of this Part is voidable at the option of any party to the agreement who 20 is not in breach of a provision of this Part by notice in writ- ing to the other party to the agreement at any time within 1 month after the innocent party has notice that the agreement is in breach of a provision of this Part.
Compare: 1998 No 88 s 86 25 96 Substance matters, not form Any question under this Part or Schedule 2 or 3 is to be deter- mined according to the nature, substance, and economic effect of the interest or relationship or other facts, and independently of form.
Compare: 1988 No 234 s 5(4), (5), (6); 1998 No 88 s 14 30 69 Part 4 cl 97 Electricity Industry Bill Part 4 Industry participants and consumers Subpart 1—Dispute resolution Complaints about Transpower, distributors, and retailers 97 (1) Any person described in subsection (2) may make a com- 5 (2) (3) (4) plaint to the dispute resolution scheme concerning Transpower (except in its capacity as system operator) or any distributor or retailer.
The persons who may make a complaint are any persons (including consumers, potential consumers, and owners and 10 occupiers of land) except members of the dispute resolution scheme.

The dispute resolution scheme is either— (a) the approved scheme identified in clause 3 of Sched- ule 4; or the regulated scheme appointed under clause 17 of Schedule 4.

(b) The procedures for making complaints to the dispute reso- lution scheme are as set out in the rules of the dispute reso- lution scheme.
Compare: 1992 No 122 s 158G 98 Membership of dispute resolution scheme (1) Transpower (other than in its capacity as system operator), and every distributor and retailer, must be a member of the dispute resolution scheme, unless exempt under subsection (3).

(2) A person commits an offence and is liable on summary convic- tion to a fine not exceeding $100,000 if the person knowingly refuses or fails to become a member of the dispute resolution scheme.
(3) A person need not be a member of a dispute resolution scheme 30 the person is a member of a class of industry participants identified in regulations made under section 118 as a class of industry participants that need not be members; or 35 if— (a) 70 15 20 25 Electricity Industry Bill Part 4 cl 99 (b) the Minister of Consumer Affairs issues a exempts the person by issuing an individual exemption notice in the Gazette that— (i) states that identifies the person that is exempt from the obligation to be a member; and includes a statement of the gives reasons for the exemption.
(ii) 5 (3A) The Minister of Consumer Affairs may grant an individual ex- emption to a person only if he or she is satisfied that member- ship of the dispute resolution scheme by the person is not ne- 10 cessary in order to meet the purpose of the dispute resolution scheme because complaints are unlikely to be made against the person or because complaints should be made in another forum.
(3B) The Minister of Consumer Affairs may amend or revoke an 15 individual exemption, by issuing a notice in the Gazette that identifies the exempt participant and gives reasons for the amendment or revocation, but only if the Minister— (a) has given notice of the proposed amendment or revo- cation to the exempt person (where possible) and given 20 the person a reasonable opportunity to comment on the proposal; and is satisfied that the amendment or revocation is neces- sary or desirable in order to meet the purpose of the dis- pute resolution scheme.
25 (b) (4) (4) (5) is not a regulation for any purpose; and To avoid doubt, a notice issued under subsection (3)(b)— (a) (b) may be amended or revoked at any time.

To avoid doubt, an individual exemption notice issued under subsection (3)(b) is not a regulation for any purpose.

The Ministry must publicise a list of all current class and in- dividual exemptions.

Compliance with rules and binding settlements 99 (1) Members of the dispute resolution scheme must comply with the rules of the scheme.
30 35 71 Part 4 cl 100 Electricity Industry Bill (2) On the application of the person responsible for the dispute resolution scheme, a District Court may require a member of the scheme to do either or both of the following: comply with the rules of the scheme: (a) comply with a binding settlement determined by the 5 (b) scheme in response to a complaint.
(3) (4) If a District Court is satisfied that the terms of a binding settle- ment are manifestly unreasonable, the court’s order under sub- section (2)(b) may modify the terms of the binding settle- ment, but only to the extent that the modification results in a 10 binding settlement that could have been made under the dis- pute resolution scheme.
If an order requiring a member to comply with a binding settle- ment includes a requirement that the member pay an amount of money to a person, that order (or part of the order) may be 15 enforced as if it were a judgment by a District Court for the payment of a sum of money.
100 Offence to fail to comply with District Court order (1) A member of the dispute resolution scheme who, knowing that the member is subject to an order made under section 99, 20 fails to comply with the order, or fails to comply with the order within the time or in the manner required by the order, commits an offence and is liable on summary conviction to a fine not exceeding $100,000.

(2) Nothing in this section applies to an order or part of an order 25 of a District Court referred to in section 99(4).
Subpart 2—Financial statements of customer and community trusts 101 Customer and community trusts must prepare audited and submit for audit financial statements The trustees of a customer trust and the trustees of a commu- nity trust must, within 4 months after the end of each financial year of the trust,— (a) prepare financial statements in accordance with gener- ally accepted accounting practice (within the meaning 35 of section 3 of the Financial Reporting Act 1993, ap- 30 72 Electricity Industry Bill Part 4 cl 103 plied as if trusts were reporting entities) with respect to the affairs of the trust for that financial year; and submit those financial statements to an auditor for audit.
(b) Compare: 1992 No 122 s 158A (2) 102 Publication of audited financial statements (1) 5 The trustees of a customer trust and the trustees of a commu- nity trust must make publicly available the financial statements referred to in section 101 and the auditor’s report on those fi- nancial statements.
The trustees must also notify the fact that copies of the docu- 10 ments referred to in subsection (1) are so available (and where) by advertisement in the news section of 2 separate edi- tions of each newspaper that is widely read by customers of the customer trust or by persons in the community of the com- munity trust (as the case requires).
Compare: 1992 No 122 s 158B 15 103 Auditor of trusts (1) (2) (3) The trustees of a community trust or and the trustees of a cus- tomer trust must, in each financial year, hold an annual meeting of beneficiaries at which the beneficiaries appoint an auditor to 20 hold office from the conclusion of that meeting until the con- clusion of the next annual meeting of beneficiaries.
The trustees of a community trust or a customer trust may fill any casual vacancy in the office of auditor by appointing an auditor to hold office until the conclusion of the next annual 25 meeting of beneficiaries (but, while the vacancy remains, the surviving or continuing auditor, if any, may continue to act as auditor).
The fees and expenses of the auditor must be fixed— (a) at the annual meeting of beneficiaries or in the way the 30 beneficiaries determine at the meeting, if the auditor is appointed at the annual meeting: by the trustees, trustees.
if the auditor is appointed by the (b) (4) An auditor of a customer trust or community trust— 35 73 Part 4 cl 104 Electricity Industry Bill (a) must be a person who is qualified to act as an auditor under section 199(1) of the Companies Act 1993 and, in selecting an auditor, the beneficiaries may seek the advice of the Auditor-General: (b) must not be a trustee, a director, an employee, or an 5 agent of the trust or of any distributor owned by the trust, or be otherwise disqualified from being an auditor under section 199(2)(b) and (d) of the Companies Act 1993.
In addition, sections 198, 200, and 202 to 207 of the Compan- 10 ies Act 1993 apply in relation to the auditor.

These sections of the Companies Act 1993 apply as if refer- ences to a company were to a trust, references to a director were to a trustee, references to a board were to the trustees, ref- erences to shareholders were to beneficiaries, references to a 15 subsidiary were to a distributor owned by the trust and the dis- tributor’s subsidiaries, and all other necessary modifications were made.
Compare: 1992 No 122 s 158C (5) (6) 104 Procedures for annual meeting to appoint auditor (1) The trustees must give no less than 14 days’ notice of the an- nual meeting of beneficiaries to appoint an auditor in the news section of 2 separate editions of each newspaper that is widely read by customers of the customer trust or by persons in the community of the community trust (as the case requires).

Every beneficiary has 1 vote.

(2) (3) The quorum for the annual meeting is 20 beneficiaries.
(4) No business may be transacted at the annual meeting if a quo- rum is not present.
Compare: 1992 No 122 s 158D 20 25 30 105 Auditor-General to be auditor if no other auditor appointed If no auditor is appointed in accordance with section 103(1) or a casual vacancy in the office of auditor is not filled within 1 month of after the vacancy occurring in accordance with 35 (1) 74 Electricity Industry Bill Part 4 cl 107 (2) (3) section 103(2), the Auditor-General must be the auditor of a customer trust or community trust.
The trustees of a customer trust or community trust must, within 5 working days of after subsection (1) becoming applicable, give written notice to the Auditor-General of this 5 fact.
If this section applies, If the Auditor-General becomes the auditor of a trust, the sections and Parts of the Public Audit Act 2001 listed in section 19 of that Act apply to the trust, until an auditor is appointed at an annual meeting of beneficiaries, as if 10 references in those sections to a public entity were references to the trust and with any other necessary modifications.
Compare: 1992 No 122 s 158E 106 Offences, enforcement, and application of sections 104 (1) (2) (3) (4) 15 to 108 101 to 105 The trustees of a customer trust and the trustees of a commu- nity trust must comply with sections 101 to 105, rather than section 46A of the Energy Companies Act 1992.
Every trustee commits an offence and is liable on summary conviction to a fine not exceeding $200,000 who, without law- 20 ful justification or excuse, knowingly acts in breach of, or fails to comply in any respect with, any provision of sections 101 to 105.

Except as provided in subsection (1), nothing in sections 101 to 105 limits any other enactment or rule of law concern- 25 ing the maintenance and auditing of the financial statements of a trust.
The Authority’s monitoring, investigation, and enforcement powers in Part 2 apply to trustees of customer trusts and trustees of consumer trusts as if those trustees were industry 30 participants.
Compare: 1992 No 122 s 158F Subpart 3—Continuance of supply 107 Continuance of distributors’ supply obligation (1) This section applies to a distributor who, in relation to any 35 place,— 75 Part 4 cl 107 Electricity Industry Bill (a) (b) is, immediately before the repeal by this Act of section 62 of the Electricity Act 1992, prohibited from ceasing to supply line function services to the place without the prior consent of either the Minister or every consumer who would be affected by the cessation of those ser- 5 vices; or is the successor in business to a distributor referred to in paragraph (a).
(2) A distributor to whom this section applies must, in relation to the place referred to in subsection (1), either— (a) supply line function services to the place so that the place is within the distributor’s network; or supply the place with electricity from an alternative source.
(b) 10 (3) The obligation in subsection (2) is subject to anything to 15 the contrary in the Electricity Act 1992, any regulations made under section 169 of that Act, or any written agreement, en- tered into before this section comes into force, between the distributor and a landowner who is, or would be but for the agreement, affected by the obligation.
20 (4) A distributor who is obliged under subsection (2) to supply line function services or electricity from an alternative source to a place commits an offence, and is liable on summary con- viction to a fine not exceeding $10,000 and to a further fine not exceeding $1,000 for every day or part of a day during which 25 the offence continues, if the distributor,— (a) having been made aware that supply to the place has ceased in the circumstances described in section 108(2)(a), fails to resume supply as soon as is reason- able in the circumstances; or knowingly ceases to supply line function services or electricity (as the case may be) to the place, other than in circumstances described in section 108(2)(b) or (c).
30 (b) In this section and sections 108 to 110,— landowner, in relation to a place, means a person who owns 35 the lines or electrical installations at the place, being lines or electrical installations to which a distributor’s lines are con- nected (5) 76 Electricity Industry Bill Part 4 cl 109 supplying electricity from an alternative source means sup- plying a place with electricity from a source other than a dis- tributor’s network, and includes, if necessary, supplying the associated line function services to deliver that electricity.
Compare: 1992 No 122 s 62 5 108 Cessation and suspension of supply obligation (1) A distributor’s obligation under section 107(2) comes to an end with respect to a place if— (a) the landowner and (if the landowner is not the con- sumer) the consumer, or the Minister, agree in writing 10 to the obligation coming to an end; or the obligation is assigned to, or assumed by, a successor in business to the distributor.
(2) The obligation in section 107(2) is suspended, in relation to any place, in any of the following circumstances: (a) 15 the supply of line function services or electricity from an alternative source has ceased as a result of circum- stances beyond the control of the distributor (such as fire, earthquake, or inevitable accident): the supply of line function services or electricity from 20 an alternative source needs to cease for reasons of safety or in order to carry out maintenance or upgrading work: the distributor, or a retailer, is entitled to cease supply (whether of line function services or electricity) because the consumer has failed of a failure to pay money due 25 on account to the distributor or retailer in respect of the place.
(b) (b) (c) (3) If the supply of line function services or electricity from an alternative source ceases in any of the circumstances described in subsection (2), the cessation may continue only for as long 30 as the reason for cessation continues.
109 Proposal to supply electricity from alternative source (1) A distributor to whom section 107 applies, and who pro- poses to comply with section 107(2) by supplying a place with electricity from an alternative source, must give at least 35 6 months’ notice of the proposal to— (a) every consumer affected by the proposal; and 77 Part 4 cl 110 Electricity Industry Bill (2) (3) (4) (b) if the landowner is not the consumer, the landowner; and every retailer who supplies electricity to the place; and (c) the public in the district in which the place is situated.
(d) The notice to each affected consumer and any landowner 5 must— (a) (b) outline the proposal; and describe how, under the proposal, the consumer’s rea- sonable electricity needs will be met; and give the consumer and any landowner a reasonable 10 period in which to comment on the proposal.

(c) If the distributor is unable to locate a landowner of a place after taking reasonable steps to do so, the distributor is not required to give notice to the landowner under subsection (1).
The notice to the public must be by way of a notice— (a) published in a newspaper that is published at least weekly and that circulates in the district to which the proposal relates; and that outlines the proposal and specifies the time within which any person may comment on it.

(b) 15 20 (5) The distributor must have regard to any comments received in response to the proposal.
110 Application of other enactments to distributors subject to obligation in section 107(2) (1) Any obligations under the following that apply to retailers 25 apply to a distributor in connection with any supply by the dis- tributor of electricity from an alternative source, if that supply is in fulfilment of the supply obligation in section 107(2): (a) obligations under this Act, the regulations, and the Code: obligations under the Electricity Act 1992 and any regu- lation made under that Act.
(b) 30 (2) However, regulations made under section 120 about low fixed charge tariff options do not apply to a distributor in respect of consumers to whom the distributor supplies electri- 35 city from an alternative source.
78 Electricity Industry Bill Part 4 cl 112 (3) (4) If a distributor, during a trial or transition in the course of com- plying with section 107(2), both supplies a place with line function services that connect the place to a network and, at the same time, supplies the place with electricity from an al- ternative source, the distributor is not to be treated as thereby 5 being involved in generation or retailing for the purposes of Part 3.
For the purposes of subpart 9 of Part 4 of the Commerce Act 1986, the Commerce Commission must treat the costs of pro- viding electricity to a place from an alternative source, and 10 any cost arising in respect of a place from an agreement under section 108(1)(a), as if the costs were the cost of providing electricity lines services (as defined in section 54C of the Com- merce Act 1986), but only if those costs are less than the costs would have been had electricity continued to be supplied to 15 the place by line function services.
Subpart 4—Price restraint for line charges for domestic and rural consumers 111 Purpose of subpart The purpose of this subpart is to enable, in the event of a 20 change in charges for line function services, the protection of domestic and rural consumers against a rate of change and level of change that is inappropriate.
Compare: 1998 No 88 s 2(3) 112 Regulations relating to charges for line function services (1) The Governor-General may from time to time, by Order in Council, make regulations imposing or providing for the im- position of restraint in respect of the charges relating to line function services— (a) (b) to domestic premises: to consumers in sparsely populated areas (rural con- sumers).
25 30 (2) Regulations made under this section may impose, or provide for the imposition of, price restraint in respect of the charges relating to line function services to domestic premises or rural 35 consumers— 79 Part 4 cl 113 Electricity Industry Bill (a) (b) by distributors generally or by particular classes of dis- tributors or by individual distributors: for particular classes of areas or a specified area or areas, defined by reference to geographic area or sparsity of population or distance from main centres or any other 5 method of definition: for particular classes of consumers.
(c) Regulations made under this section do not apply to— (a) the offering to consumers of terms and conditions for new line function services: charges relating to the national grid.

(b) Regulations made under this section may impose, or provide for the imposition of, price restraint in respect of charges for line function services, despite the fact that the charge is not payable directly by an end-consumer to a distributor, but is 15 payable via a retailer.
Subsections (2) and (4) do not limit subsection (1) Compare: 1998 No 88 s 88 10 (3) (4) (5) 113 Way in which price restraint may be imposed (1) Price restraint imposed by or pursuant to regulations made 20 under section 112 may specify the manner in which the charges for line function services to domestic premises or rural consumers are to be restrained, and may, in particular,— control, in relation to charges for line function services (a) to domestic premises or rural consumers,— (i) (ii) (iii) the amount of the charge: the amount of any component of the charge: the proportion that any component of the charge may bear to the total charge or to any part of the charge: 30 25 (b) (c) control the frequency with which the charge, or any component of the charge, may be increased: control the amount of any increase in the charge, or any component of the charge.
(2) Any controls imposed by or pursuant to any power conferred 35 by subsection (1) may be expressed to operate by reference to the charge lawfully being charged in respect of the line func- tion services on any date specified for the purpose in the regu- 80 Electricity Industry Bill Part 4 cl 114 lations, being the date of the commencement of the regulations or any other date, whether before or after the date of the com- mencement of the regulations.

This section does not limit section 112.


Compare: 1998 No 88 s 89 5 (3) 114 Offences (1) (2) Every person commits an offence and is liable on summary conviction to a fine not exceeding $500,000 who, without law- ful justification or excuse, acts in breach of, or fails to com- ply in any respect with, any provision of any regulations made 10 under section 112.
The court, in addition to or instead of passing any other sen- tence or making any other order, may make an order for the payment by the defendant of an amount not exceeding the difference (to be ascertained and specified by the court) be- 15 tween the amount charged for the line function services and the amount so authorised or permitted if— (a) a person is convicted of an offence against this section; and the offence consists of or includes charging for line 20 function services to domestic premises or rural con- sumers in excess of the charge that is authorised or per- mitted by regulations made under section 112.
(b) (3) All money payable pursuant to an order made under subsec- tion (2) is recoverable, in accordance with the Summary Pro- 25 ceedings Act 1957, in the same manner as fines are recover- able.
(4) Where, in any case to which subsection (2) applies, the court is satisfied that the whole or any part of the charge has been paid to the defendant by any other person, the court, if it con- 30 siders that it is just and equitable, may make an order author- ising the payment to that other person of the whole or such part of any amount paid by the defendant under that subsection, as the court thinks fit.
(5) An order under subsection (4) is sufficient authority to the 35 Registrar of the court to pay the amount so authorised.

Compare: 1998 No 88 s 91 81 Part 4 cl 115 Electricity Industry Bill 115 Other Acts relating to regulated goods or services not affected Nothing in this subpart limits or affects Part 4 of the Commerce Act 1986 (which relates to regulated goods or services) or any other enactment relating to price restraint or controlled goods 5 or services.
Compare: 1998 No 88 s 92 Part 5 Miscellaneous Subpart 1—Regulations 10 116 Regulations identifying industry service providers as industry participants The Governor-General may, by Order in Council made on the recommendation of the Minister, given after consulting the Authority, make regulations identifying which industry ser- 15 vice providers, in addition to those listed in section 9(2), are industry participants.
117 Class exemptions relating to sections 11 and 12 (1) registration and Code compliance The Governor-General may, by Order in Council made on the 20 recommendation of the Minister responsible for Part 2, given after receiving a recommendation from the Authority, make regulations that do either or both of the following: (a) identify a class of industry participants that is exempt from the obligation in section 11(1)(a) to register: identify a class of industry participants that is exempt from the obligation in section 11(1)(b) to comply with the Code or specific provisions of the Code.
(b) 25 (2) Regulations made under subsection (1)(b) may exempt a class of industry participants from all or specified provisions 30 of the Code.
118 Class exemption relating to section 98 membership of dispute resolution scheme The Governor-General may, by Order in Council made on the recommendation of the Minister responsible for Part 4, make 35 82 Electricity Industry Bill Part 5 cl 119 regulations identifying a class of industry participants that is exempt from the obligation in section 98(1) to be a member of a dispute resolution scheme.
119 Regulations relating to monitoring, investigating, and (1) 5 (b) enforcing Code The Governor-General may, by Order in Council made on the recommendation of the Minister responsible for Part 2 given after consulting the Authority, make regulations for all or any of the following purposes: (a) requiring industry participants to report breaches or 10 possible breaches of the Code, and prescribing proced- ures relating to such reporting: prescribing the practices and procedures and practices of the Authority, any investigator appointed by the Au- thority, and the Rulings Panel, in relation to monitoring 15 compliance with the Code, investigating breaches and possible breaches of the Code, and enforcing the Code: (ba) prescribing the practices and procedures of the Author- ity and the Rulings Panel in relation to the investigation of breaches and possible breaches of the Code (includ- 20 ing the appointment and powers of investigators) and other enforcement measures: prescribing the information that the Authority must or may require from industry participants generally, or classes of industry participants, and regulating what it 25 must or may do with such information: regulating the membership and operation of the Rulings Panel: (d) (c) (da) prescribing the decisions made under the Code that may (e) (e) be appealed to the Rulings Panel, and the powers and 30 procedures of the Rulings Panel associated with those appeals: providing procedures for resolving disputes between in- dustry participants: prescribing the
 disputes between industry participants, 35 or classes of such disputes, that may be considered by the Rulings Panel, and the powers and procedures of the Rulings Panel associated with considering disputes: 83 Part 5 cl 120 Electricity Industry Bill (f) (g) (h) restricting or limiting the amount of liability of, or the amount of any penalty that may be imposed upon, an industry participant or type class of industry participant: identifying regulations the breach of which are to be treated as a breach of the Code: providing for offences, punishable on summary con- viction by a fine not exceeding $20,000, for breaching any regulation made under this section or breaching any order made by the Rulings Panel under the regulations.
5 (1A) The requirement in subsection (1) to consult with the Au- 10 thority does not apply to the first regulations made under this section if— (a) the regulations largely correspond to Parts 4 to 8 of the Electricity Governance Regulations 2003, adapted as necessary for consistency with this Act; and the Minister or the Electricity Commission have con- sulted with interested parties on any material changes.
(2) A breach of any regulation made under this section is to be treated, for the purposes of enforcement under Part 2, as a breach of the Code.
Compare: 1992 No 122 ss 172D, 172K(a) 15 20 (b) 120 Regulations about tariffs and other consumer issues (1) The Governor-General may, by Order in Council made on the recommendation of the Minister given after consultation with the Minister of Consumer Affairs the consultation referred to 25 in subsection (3A), make regulations for the purpose of— (a) regulating the type of tariffs for fixed and other charges that must or may be offered to domestic consumers; and promoting the fair treatment by distributors and retailers of domestic consumers and small businesses; and enabling the protection of rural consumers, and con- sumers supplied with electricity from an alternative source under section 107, from unfair rates of change in the prices charged to them.
30 (b) (c) Regulations made under subsection (1) may, without limita- 35 tion, do any of the following: (a) require low fixed charge tariff options to be made available to consumers who use less than a prescribed (2) 84 Electricity Industry Bill Part 5 cl 120 5 10 amount of electricity, and impose requirements (in- cluding amounts, or ways of calculating amounts) on industry participants in order to ensure that those tariffs result in a benefit to domestic consumers who opt for them: provide for regional variations in the application of the regulations relating to low fixed charge tariff options: require distributors or retailers, or both, to provide in- formation relating to the types of tariffs offered to con- sumers, including to low fixed charge tariffs: regulate distributors’ and retailers’ dealings with do- including mestic consumers and small businesses, requiring distributors and retailers to comply with any policies, practices, procedures, guidelines, or model contracts or clauses in contracts, that are set out or 15 referred to in the regulations: regulate the rate of change in the prices charged by dis- tributors to rural consumers on a network as compared with the rate of change in the prices charged to compar- able non-rural consumers on the same network: regulate the rate of change in the prices charged to consumers supplied with electricity from an alternative source under section 107: provide for offences, punishable on summary convic- tion by a fine prescribed by the regulations but not ex- 25 ceeding $100,000, for breaching any regulation made under this section.
20 (b) (c) (d) (e) (f) (g) (3) Regulations made under this section may include any other provisions necessary or desirable for monitoring and enforc- ing compliance with the regulations, including making it an 30 offence, punishable by a fine not exceeding $10,000, to fail to comply with a requirement of the regulations.
(3A) Before recommending an Order in Council under this section, the Minister must— (a) (b) consult with the Minister of Consumer Affairs; and obtain and consider advice from the Authority on the impact of the proposed Order in Council on the promo- tion of competition in, the reliable supply by, and the efficient operation of, the electricity industry.
35 85 Part 5 cl 121 Electricity Industry Bill (4) (4) (5) (6) In this section, small business means a non-domestic con- sumer that consumes less than 40 MWh per year In this section,— rural consumer means a consumer in a sparsely populated area small business means a non-domestic consumer that con- sumes less than 40 MWh per year.

If any material is incorporated by reference in the regulations, Schedule 1 applies.
The Electricity (Low Fixed Charge Tariff Option for Domestic 10 Consumers) Regulations 2004 are deemed to have been made under this section.

Compare: 1992 No 122 ss 172B, 172D 5 121 Regulations promoting accountability in customer trusts 15 and community trusts The Governor-General may, by Order in Council made on the recommendation of the Minister, make regulations for the pur- pose of promoting the accountability of customer trusts and community trusts.
Regulations made under this section may, without limitation, 20 do any of the following: (a) require trustees to disclose specified information to beneficiaries of the trust: specify procedures concerning requests by beneficiaries for information from trusts and trustees, responses to 25 such requests, and rights to review responses: require trustees to hold meetings for beneficiaries, and regulate the practices and procedures associated with those meetings.
(b) (c) Regulations made under this section may include provisions 30 necessary or desirable for monitoring and enforcing compli- ance with the regulations, including making it an offence, pun- ishable by a fine not exceeding $10,000, to fail to comply with a requirement of the regulations.

If any material is incorporated by reference in the regulations, 35 Schedule 1 applies.
Compare: 1992 No 122 s 172C (1) (2) (3) (4) 86 Electricity Industry Bill Part 5 cl 123 122 General regulation-making powers The Governor-General may from time to time, by Order in Council, make regulations for all or any of the following pur- poses: (a) prescribing the matters in respect of which fees or 5 charges are payable under this Act or the regulations, the amounts of those fees or charges, or the method or rates by which they are to be assessed, the persons liable for payment of those fees or charges, and the circumstances in which the payment of the whole or 10 any part of those fees or charges may be refunded or waived: providing for such other matters as are contemplated by, or are necessary for giving full effect to, this Act and for its due administration.
15 (b) 123 Compare: 1998 No 88 s 87 Subpart 2—Miscellaneous State-owned enterprise asset reconfiguration and miscellaneous matters State-owned enterprise asset reconfiguration: General provisions 20 Interpretation for section 124 In section 124, unless the context otherwise requires,— board means the board of directors of a State generator shareholding Ministers means the Minister of Finance and 25 the Minister for State Owned Enterprises State generator— (a) means each of the following State enterprises: Genesis Power Limited: (i) (ii) Meridian Energy Limited: (iii) Mighty River Power Limited; and includes a subsidiary of a State enterprise listed in para- graph (a).
Compare: 1998 No 88 s 97 (b) 30 87 Part 5 cl 124 Electricity Industry Bill 124 Directions by shareholding Ministers (1) 5 (b) The purpose of this section is to improve competition in both wholesale and retail electricity markets, and make improve- ments in security of supply, by adjusting the configuration of assets held by State generators.
The shareholding Ministers may, at any time before 1 Octo- ber 2011, give to the board of all or any of the State generators 1 or more of the following directions: (a) a direction requiring the State generators to enter into 1 or more long-term contracts (of up to 15 years’ dura- 10 tion) with each other for financial hedges for electricity for the purpose of this section: a direction requiring the transfer of ownership (such as by way of sale and purchase agreement) from Meridian Energy Limited to Genesis Energy Limited of all assets 15 and any rights and obligations relating to Tekapo A and Tekapo B generating stations: a direction requiring Meridian Energy Limited to pur- chase from the Crown all assets and any rights and obli- gations of the Crown relating to the Whirinaki generat- 20 ing station: a direction specifying some or all of the terms and con- ditions of any contract required under any of para- graphs (a) to (c).
The shareholding Ministers— (a) may at any time advise the board of their intentions or expectations with regard to directions to be given under this section; and (d) (c) 25 (b) must advise the relevant board of the matters to be re- ferred to in a direction to be given under this section at 30 least 14 days before the direction is given; and (c) must consider any comments that the board makes to them relating to the direction within 10 days of the date on which the board receives the advice under para- graph (b).
35 The shareholding Ministers may give a direction under this section despite anything to the contrary in sections 4 to 7 of the State-Owned Enterprises Act 1986 or in the Companies Act 1993 or any other Act or rule of law.

(2) (3) (4) 88 Electricity Industry Bill Part 5 cl 125 (5) The board must comply with a direction given to it under this section despite anything to the contrary in the State-Owned Enterprises Act 1986, the Companies Act 1993, or any other Act or rule of law.
(6) Neither the Crown nor any shareholding Minister is in breach 5 of, or liable to any person under, sections 4 to 7 of the State- Owned Enterprises Act 1986, the Companies Act 1993, or any other Act or rule of law by reason of the giving of a direction under subsection (2) or advice under subsection (3).
(7) No director of a State generator is in breach of, or liable to any 10 person under, the State-Owned Enterprises Act 1986, under the Companies Act 1993, or any other Act or rule of law by reason of any act or omission reasonably believed by the dir- ector to be necessary or desirable— (a) to give effect to, or as a consequence of, a direction 15 given under subsection (2); or (b) as a result of any advice given under subsection (3).
Every direction or notice given under this section must be given in writing.

The Minister for State Owned Enterprises must— (a) (8) (9) 20 present a copy of the direction to the House of Rep- resentatives within 12 sitting days after a direction is given to the board under this section; and publish a copy of it in the Gazette as soon as practicable after the giving of the direction.
25 (b) Compare: 1998 No 88 s 98 125 Obligation of Authority relating to Whirinaki If a direction is given under section 124(2)(c) (relating to the purchase by Meridian Energy Limited of the Crown’s assets, rights, and obligations in the Whirinaki generating station), the 30 Authority must— (a) co-operate with the Crown and Meridian Energy Limited to facilitate the purchase; and ensure that the obligations relating to the supply by Whirinaki generating station of reserve energy are 35 ended in a timely manner and in a way that limits the risks to security of supply.
(b) 89 Part 5 cl 123 Electricity Industry Bill 123 5 Interpretation for subpart In this subpart, unless the context otherwise requires,— board means the board of directors of a State generator consent authority means a consent authority under the Re- source Management Act 1991 Genesis means Genesis Power Limited, and includes any sub- sidiary of that company Meridian means Meridian Energy Limited, and includes any subsidiary of that company Mighty River means Mighty River Power Limited, and in- 10 cludes any subsidiary of that company permit means a water permit or a discharge permit granted, or deemed to be granted, under the Resource Management Act 1991 shareholding Ministers means the Minister of Finance and 15 the Minister for State Owned Enterprises State generator means each of Genesis, Meridian, and Mighty River Waitaki Power Scheme means the activities allowed by the resource consents numbered from CRC905301.1 to 20 CRC905366.1 relating to the generation of electricity within the Waitaki River system.
Compare: 1998 No 88 s 97 124 Directions that may be given by shareholding Ministers (1) The purpose of this section is to improve competition in both 25 wholesale and retail electricity markets, and make improve- ments in security of supply, by adjusting the configuration of assets held by State generators.
The shareholding Ministers may, at any time before 1 October 2011, give to the board of all or any of the State generators 1 30 or more of the following directions: (a) a direction requiring the State generators to enter into 1 or more long-term contracts (of up to 15 years’ dura- tion) with each other for financial hedges for electricity for the purpose of this section: a direction requiring the transfer of ownership (such as by way of sale and purchase agreement) from Meridian 35 (b) (2) 90 Electricity Industry Bill Part 5 cl 124AB (c) (d) to Genesis of all assets and any rights and obligations relating to Tekapo A and Tekapo B generating stations: a direction requiring Meridian to purchase from the Crown all assets and any rights and obligations of the Crown relating to the Whirinaki generating station: 1 or more directions requiring the State generators to en- ter into 1 or more contracts that are necessary or desir- able to implement a direction under any of paragraphs (a) to (c) and specifying some or all of the terms and conditions of those contracts.
5 10 Compare: 1998 No 88 s 98(1) 124AA Process for giving directions (1) The shareholding Ministers— (a) may at any time advise the relevant board of their in- tentions or expectations with regard to directions to be 15 given under section 124; and (b) must advise the relevant board of the matters to be re- ferred to in a direction to be given under section 124 at least 14 days before the direction is given; and (c) must consider any comments that the relevant board 20 makes to them relating to the direction within 10 days after the date on which the board receives the advice under paragraph (b).
(2) (3) Every direction given under section 124 must be in writing.

The Minister for State Owned Enterprises must— (a) present a copy of any direction given under section 124 to the House of Representatives within 12 sitting days after the direction is given to the board; and publish a copy of it in the Gazette as soon as practicable after giving the direction.
(b) 25 30 Compare: 1998 No 88 s 98(2), (7) 124AB Legal effect of directions (1) The shareholding Ministers may give a direction under sec- tion 124 despite anything to the contrary in sections 4 to 7 of the State-Owned Enterprises Act 1986 or in the Companies 35 Act 1993 or any other Act or rule of law.
91 Part 5 cl 124A Electricity Industry Bill (2) The board must comply with a direction given to it under sec- tion 124 despite anything to the contrary in the State-Owned Enterprises Act 1986, the Companies Act 1993, or any other Act or rule of law.
(3) Neither the Crown nor any shareholding Minister is in breach 5 of, or liable to any person under, sections 4 to 7 of the State- Owned Enterprises Act 1986, the Companies Act 1993, or any other Act or rule of law by reason of giving a direction under section 124 or advice under section 124AA.
(4) No State generator, and no director, employee, or contractor 10 of, or adviser to, a State generator, is in breach of, or liable to any person under, the State-Owned Enterprises Act 1986, the Companies Act 1993, or any other Act or rule of law by reason of any act or omission reasonably believed by the person to be necessary or desirable— (a) to give effect to, or as a consequence of, a direction given under section 124; or as a result of advice given under section 124AA.
(b) 15 (5) No director, employee, or contractor of, or adviser to, a State generator is in breach of, or default under, any agreement, or in 20 breach of confidence, or in the position of having committed any tort (including negligence) or other civil wrong, by reason of any act or omission referred to in subsection (4).
Compare: 1998 No 88 s 98(3)-(6) Asset reconfiguration provisions in respect of Waitaki Power Scheme 25 124A Purposes of sections 124B to 124G (b) The purposes of sections 124B to 124G are— (a) to facilitate the transfer to Genesis of the permits in the Waitaki Power Scheme relating to the Tekapo A and 30 Tekapo B generating stations; and to maintain, despite Meridian no longer controlling the entire Waitaki Power Scheme,— (i) the conditions of the permits that relate to envir- onmental effects; and the rights and obligations as specified in the con- ditions of the permits; and 35 (ii) 92 Electricity Industry Bill Part 5 cl 124C (iii) the rights and obligations as specified in the exist- ing agreements referred to in section 124D.
124B Process for Meridian and Genesis to recommend changes to permit conditions in respect of Waitaki Power Scheme (1) Meridian and Genesis must, in consultation with the consent 5 authority, identify, and agree (if possible) any recommended changes to the conditions of the permits that are, in the opinion of Meridian and Genesis, necessary to meet the purposes set out in section 124A.
The Minister, by notice to Meridian and Genesis, may specify 10 a date by which the recommended changes must be provided to the Minister.

(2) (3) Meridian and Genesis may provide separate or joint recom- mendations.

(4) Meridian and Genesis must provide the recommended changes 15 (5) to the Minister by the date specified by the Minister.
The Minister must, as soon as practicable after receiving any recommended changes, notify the consent authority of the rec- ommended changes, and specify a date by which the con- sent authority may make representations to the Minister about 20 whether those changes would maintain the effects on the en- vironment that are achieved by the current conditions of the permits.
(2) 124C Minister may change permit conditions by order (1) The Minister may, after consultation with the Minister for the 25 Environment, make an order changing 1 or more of the condi- tions of a permit.
The Minister may make an order only if the Minister is satis- fied that— (a) the changes to the conditions are needed only because 30 of the transfer of the Tekapo A and Tekapo B generating stations; and it is not reasonably practicable to achieve the purposes set out in section 124A by means of a direction re- quiring Meridian and Genesis to enter into 1 or more 35 contracts with each other; and (b) 93 Part 5 cl 124D Electricity Industry Bill (c) (d) (e) changes to the conditions achieve the purpose set out in section 124A(b) in all material respects; and either or both of Meridian and Genesis have recom- mended changes to the conditions after consultation with the consent authority; and the Minister has considered any representations made by the consent authority by the date specified under sec- tion 124B(5).
5 (3) An order under this section— (b) (a) must be notified in the Gazette, and publicised by the 10 Minister and the consent authority, as soon as practic- able after it is made; and takes effect on a date specified in the order (which may be on or before the date that the permits are transferred to Genesis under the Resource Management Act 1991 15 but may not be before the date of the notice in the Gazette); and takes effect as if it were a change to a condition that had been made by the consent authority; and is a regulation for the purposes of the Regulations (Dis- 20 allowance) Act 1989 but not for the purposes of the Acts and Regulations Publication Act 1989.
(d) (c) (4) The Minister must present a copy of the order to the House of Representatives in accordance with section 4 of the Regula- tions (Disallowance) Act 1989.
25 124D Existing agreements with other parties in respect of Waitaki Power Scheme This section and section 124E apply to the following (the existing agreements): (a) (b) the agreements listed in Schedule 4A; and any other written agreements to which Meridian is a party (other than employment agreements)— (i) 30 that, in the opinion of the Minister, relate directly to the ownership or operation of either or both of Tekapo A and Tekapo B generating stations and 35 that Meridian will no longer be able to perform, or no longer requires, as a result of the transfer of ownership of the generating stations; and (1) 94 Electricity Industry Bill Part 5 cl 124E (ii) in respect of which the Minister has given notice in the Gazette that this subpart applies.
(2) No existing agreement is terminated only because Meridian no longer controls the entire Waitaki Power Scheme.

(3) However, a party to an existing agreement (other than Merid- 5 ian or Genesis) may, by notice in writing to the Minister, Meridian, and Genesis, terminate the party’s involvement in the agreement in accordance with section 124E(2)(c) or (9).
124E Reconfiguration of existing agreements (1) The shareholding Ministers may include, in a direction given 10 under section 124(2)(b), 1 or more of the following: (a) (b) (c) a direction requiring Meridian and Genesis to negotiate the retention or transfer, or the sharing or splitting (as the case may be), of the existing agreements in a way that meets the purposes set out in section 124A: a direction requiring either or both of Meridian and Genesis to offer to any other parties that have rights or obligations under the existing agreements (third par- ties) 1 or more replacement contracts that are necessary to meet the purposes set out in section 124A: dates by which things must be completed, for ex- ample,— (i) dates by which replacement contracts must be offered: dates by which choices must be made under sub- 25 section (2) or (9).
(ii) 15 20 (2) A third party that has rights or obligations under an existing agreement must choose, by the date specified under subsec- tion (1)(c),— (a) (b) to enter into any replacement contract that is offered; or 30 for the existing agreement to continue in accordance with a direction to be given under subsection (4); or to terminate the existing agreement.
(c) If a third party chooses to enter into any replacement contract that is offered, the existing agreement ceases to have effect to 35 the extent that it is replaced by the replacement contract.
(3) 95 Part 5 cl 124E Electricity Industry Bill (4) (5) (6) (7) (8) If a replacement contract has not been entered into by the date specified in a direction under subsection (1)(c), the share- holding Ministers may give to the boards of Meridian and Gen- esis a further direction specifying— (a) which existing agreements Meridian must remain a 5 party to; and (b) which existing agreements Genesis must become a (c) party to; and which agreements are to be shared between the gener- ators by Genesis becoming a party to the agreements in 10 addition to Meridian; and (d) which agreements are to be split, by Meridian remain- ing a party in relation to certain provisions and Genesis replacing Meridian as a party in relation to other provi- sions.
15 If a direction is given under subsection (4)(a) in respect of an existing agreement, Meridian and the third parties to the agreement remain subject to the agreement as if this Act had not been passed.

If a direction is given under subsection (4)(b) in respect of 20 an existing agreement, all rights and obligations of Meridian under the agreement become the rights and obligations of Gen- esis on the date specified in the direction.
If a direction is given under subsection (4)(c) in respect of an existing agreement, all rights and obligations of Meridian 25 under the agreement become the joint and several rights and obligations of Meridian and Genesis on the date specified in the direction.
If a direction is given under subsection (4)(d) in respect of an existing agreement, on the date specified in the direction the 30 rights and obligations of Meridian under the agreement remain with Meridian except to the extent that any of those rights and obligations are transferred to Genesis.
(9) However, a party to an existing agreement in respect of which a direction is given under subsection (4) (other than Merid- 35 ian or Genesis) may terminate the party’s involvement in the agreement, by notice in writing to the Minister, Meridian, and Genesis given by the further date specified under subsection (1)(c).

96 Electricity Industry Bill Part 5 cl 125 (10) In this section, rights and obligations includes entitlements and liabilities.
124F Other provisions about directions (1) Sections 124AA and 124AB apply to any direction given under section 124E(1) or (4).

This section and section 124E do not limit section 124.

(2) 5 124G Interface with Resource Management Act 1991 (1) Sections 88 to 121 and 127 of the Resource Management Act 1991 do not apply in respect of any matters under sections 124B to 124F.

There are no other appeal rights in respect of any matters under sections 124B to 124F.
To avoid doubt, the Waitaki Catchment Water Allocation Re- gional Plan is not changed by this Act, and its effect on per- mits that are transferred or changed under this subpart is not 15 affected by the transfer or change.
10 (2) (3) Asset reconfiguration provision in respect of Whirinaki 125 Obligation of Authority relating to Whirinaki If a direction is given under section 124(2)(c) (relating to 20 the purchase by Meridian of the Crown’s assets, rights, and obligations in the Whirinaki generating station), the Authority must— (a) co-operate with the Crown and Meridian to facilitate the purchase; and continue the Commission’s reserve energy scheme with respect to the Whirinaki generating station, and the con- tract providing for that generating station (and the asso- ciated assets, rights, and liabilities) to be available for the purposes of reserve energy, until the date when the 30 purchase by Meridian is complete or any earlier date de- termined by the Minister.
25 (b) 97 Part 5 cl 126 Electricity Industry Bill Levy of industry participants 126 Levies (1) Every industry participant (or prescribed class of industry par- ticipant) must pay to the Authority on behalf of the Crown a levy prescribed by regulations.

The Governor-General may, by Order in Council made on the recommendation of the Minister, make regulations providing for the levy.
The levy must be prescribed on the basis that the following costs should be met fully out of the levy: (a) 5 10 the estimated costs of the Authority in performing its functions and exercising its powers and duties under this Act and any other Act enactment; and the estimated costs to the Authority resulting from con- tracts entered into by the Electricity Commission in 15 respect of reserve energy and the continuation under section 125(b) of the Commission’s reserve energy scheme with respect to the Whirinaki generating sta- tion; and a portion of the estimated costs of the Energy Efficiency 20 and Conservation Authority in performing its functions and exercising its powers and duties under the Energy Efficiency and Conservation Act 2000 in relation to the encouragement, promotion, and support of electricity efficiency, where the size of the portion to be met by 25 levies under this Act is determined by the Minister after receiving a report on the outcome of consultation in ac- cordance with section 127; and the costs incurred by the Crown before 1 April 2014 in promoting to customers the benefits of comparing 30 and switching retailers, subject to both of the following limits: (i) (ii) a limit of $5 million per financial year; and an overall limit of $15 million for the period com- mencing on 1 October 2010 and ending with 35 30 March 2014; and the costs of the Rulings Panel; and (b) (c) (d) (e) (2) (3) 98 Electricity Industry Bill Part 5 cl 126 (f) (g) the costs of establishing and operating any regulated dispute resolution scheme in respect of the electricity industry under Schedule 4; and the costs incurred by the Crown in relation to develop- ing and publishing forecasts regional electricity supply 5 and demand forecasts and scenarios, and related infor- mation and analysis, for the purpose of assisting invest- ment planning by industry participants; and the costs of collecting the levy money.
(h) The levy may be prescribed on the basis that any actual cost 10 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.
The regulations may— (a) (4) (5) (b) (c) (d) (e) (f) (g) (h) 20 specify the amount of the levy or method of calculating 15 or ascertaining the amount of the levy: include or provide for including in the levy any shortfall in recovering the actual costs: refund or provide for refunds of any over-recovery of those actual costs: provide for different levies for different classes of in- dustry participants: specify the financial year or part financial year to which a levy applies, and apply that levy to that financial year or part financial year and each subsequent financial year 25 until the levy is revoked or replaced: provide for the payment and collection of levies: for the first financial year to which the levy applies, in- clude in the levy amount or method the costs relating to establishing the Authority, disestablishing the Electri- 30 city Commission, and preparing the initial Code, from 1 January 2010, and of the Authority performing its functions and duties and exercising its powers under this Act: require payment of a levy for a financial year or part fi- 35 nancial year, irrespective of the fact that the regulations may be made after that financial year has commenced: 99 Part 5 cl 127 Electricity Industry Bill (i) exempt or provide for exemptions from, or provide for waivers of, the whole or any part of the levy for any case or class of cases.
The levy for a financial year that starts after the Authority be- gins to carry out any additional function under this Act or any 5 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 the start of the finan- cial year.

The amount of any unpaid levy is recoverable in any court of 10 competent jurisdiction as a debt due to the Authority on behalf of the Crown.
The Authority must pay into a Crown Bank Account, and sep- arately account for, each levy payment.
(6) (7) (8) 127 Each Authority must consult Consultation about request 15 for appropriation The Authority and the Energy Efficiency and Conservation Authority 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, 20 that relates to costs that are intended to be recovered by way of levies under section 126, consult those industry partici- pants who are liable to pay a levy under that section about that request.
about that request with— (a) those industry participants who are liable to pay a levy 25 under that section; and any other representatives of persons whom the Author- ity believes to be significantly affected by a levy.

Each Authority must, at the time when the request is submit- ted, report to the Minister on the outcome of that consultation.

30 The Ministry must consult in a like manner in respect of a levy to recover costs referred to in section 126(3)(g).
This section applies to requests in respect of the financial year beginning 1 July 2011 and later financial years.
(b) (1) (2) (3) (4) 100 Electricity Industry Bill Part 5 cl 128A Authorisation for restrictive trade practices rules Specific authorisations for purposes of Commerce Act 1986 128 Specific authorisation for purposes of restrictive trade 5 practices rules Anything done or omitted by the Authority, the Rulings Panel, or an industry participant that is reasonably necessary to com- ply with, enforce, or otherwise administer this Act, the regu- lations, or the Code is specifically authorised for the purpose 10 of section 43 of the Commerce Act 1986.
Compare: 1992 No 122 s 172ZR 128 Specific authorisations for purposes of Commerce Act (1) 1986 The following are specifically authorised for the purpose of 15 section 43 of the Commerce Act 1986: (a) anything done or omitted by the Authority, the Rulings Panel, or an industry participant that is reasonably ne- cessary to comply with, enforce, or otherwise adminis- ter this Act, the regulations, or the Code; and anything done or omitted by a State generator pursuant to a direction given under this subpart; and anything done or omitted to be done by an industry par- ticipant for the purpose of developing and operating an active market for trading financial hedge contracts for 25 electricity.
20 (b) (c) (2) Section 47 of the Commerce Act 1986 does not apply to any transfer of assets undertaken by a State generator pursuant to a direction given under section 124(2)(b) or (c).
Compare: 1992 No 122 s 172ZR 30 Distributors’ exemption from liability 128A Distributors exempt from liability for certain outages No claim for damages may be made against a distributor in relation to damage caused by, or arising from, an outage that resulted from the distributor complying with— 35 101 5 10 15 20 Part 5 cl 129 Electricity Industry Bill 129 (a) (b) the regulations or the Code; or any instruction issued by the Authority or the system operator under the regulations or the Code that the dis- tributor was obliged to comply with.
Subpart 3—Transitional and consequential provisions Dissolution of Electricity Commission Interpretation In sections 129 to 135 this subpart, unless the context other- wise requires,— commencement date means the date on which this section comes into force Electricity Commission means the Electricity Commission continued by section 172M of the Electricity Act 1992 property— (a) means every type of property; and (b) includes money, and every type of estate and interest in property suitable alternative position, in relation to an employee, means a position— (a) for which the employee has the appropriate skills and experience; and the pay and conditions of which are, in their overall effect, no less favourable to the employee than those applying to the employee immediately before the date 25 of the employee’s transfer to that position (b) transferred employee means a person who,— (a) immediately before the commencement date, is em- ployed by the Electricity Commission; and is transferred to the Authority under section 131(1)(f).
30 (b) Dissolution of Electricity Commission 130 Electricity Commission disestablished dissolved (1) The Electricity Commission is disestablished dissolved.

102 Electricity Industry Bill Part 5 cl 131 (2) The members of the board of the Electricity Commission cease to hold office at the close of the day before the commencement date.
131 Consequences of dissolution (1) On the commencement date,— 5 (a) (b) (c) (d) (e) (f) (g) (h) the functions, duties, and powers of the Electricity Commission under any enactment vest in the Authority, except as specifically provided otherwise in this Act but only to the extent that those functions and powers are consistent with the functions and powers of the 10 Authority under this Act (subject to subsection (5)); and all property belonging to the Electricity Commission vests in the Authority; and all information held by the Electricity Commission is 15 held by the Authority; and all money payable to or by the Electricity Commission becomes payable to or by the Authority; and all rights, liabilities, contracts, entitlements, and en- gagements of the Electricity Commission become the 20 rights, liabilities, contracts, entitlements, and engage- ments of the Authority; and subject to section 133, every employee of the Electri- city Commission becomes an employee of the Author- ity on the same terms and conditions as applied imme- 25 diately before he or she became an employee of the Au- thority; and anything done, or omitted to be done, or that is to be done, by or in relation to the Electricity Commission is to be treated as having been done, or having been 30 omitted to be done, or to be done, by or in relation to the Authority; and the commencement, continuation, or enforcement of proceedings by or against the Electricity Commission may instead be commenced, continued, or enforced by 35 or against the Authority without amendment to the pro- ceedings; and 103 Part 5 cl 131 Electricity Industry Bill (i) the completion of a matter or thing that would, but for this clause section 130(1), have been completed by the Electricity Commission, may be completed by the Authority.
(2) Despite anything in subsection (1), the Authority may ap- 5 (3) (4) point a new chief executive or general manager to commence on or after the commencement date.

The transfer of information from the Electricity Commission to the Authority under subsection (1)(c) does not constitute an action that is an interference with the privacy of an indi- 10 vidual under section 66 of the Privacy Act 1993.
The dissolution of the Electricity Commission does not, by itself, affect any of the following matters: (a) any decision made, or anything done or omitted to be done, by the Electricity Commission in relation to 15 the performance of its functions or the exercise of its powers under any enactment: any proceedings commenced by or against the Electri- city Commission: any other matter or thing arising out of the Electricity 20 Commission’s performance or exercise, or purported performance or exercise, of its functions or powers under any enactment.
(b) (c) (5) To avoid doubt, it is a function of the Authority to perform any functions or obligations arising from a transfer effected by this 25 section, even if the Authority would not otherwise have those functions or obligations.
(5) Despite subsection (1)(a), it is a function of the Authority to perform any functions and exercise any powers of the Electri- city Commission that are necessary or desirable for it to exer- 30 cise or perform, on a temporary basis,— (a) (b) in order for it to comply with section 125; or for the purpose of effectively managing the transition of functions from the Electricity Commission to the Au- thority.
35 Compare: 2008 No 47 Schedule 2 cl 26 104 Electricity Industry Bill Part 5 cl 133 132 References to Electricity Commission (1) This section applies to— (a) things that are in force or existing on the commence- ment date (whether coming into force, entered into, or created before or after the commencement of this sec- 5 tion); and references in any thing, including (without limitation) enactments, rules, bylaws, deeds, agreements, proceed- ings, instruments, documents, and notices.
(b) (2) A reference in any thing specified in subsection (1) to the 10 Electricity Commission is, on or after the commencement date, to be read as a reference to the Authority unless the context otherwise requires.
Compare: 2008 No 47 Schedule 2 cl 28 132 References in documents to Electricity Commission 15 On and after the commencement date, every reference in a document (other than an enactment) to the Electricity Com- mission must be read as a reference to the Authority, if— (a) the document was written or prepared before the com- mencement date; and such a reading is consistent with this Act.
(b) Compare: 2008 No 47 Schedule 2 cl 28 20 133 Transferred employees (1) The terms and conditions of employment of a transferred em- ployee immediately before the commencement date continue 25 to apply in relation to that employee until— (a) those terms and conditions are varied by agreement be- tween the transferred employee and the Authority; or the transferred employee accepts a subsequent appoint- ment with the Authority.
(b) (2) For the purposes of every enactment, law, determination, con- tract, and agreement relating to the employment of a trans- ferred employee,— (a) the employment agreement of that employee is to be treated as unbroken; and the employee’s period of service with the Electricity Commission, and every other period of service of that (b) 105 30 35 Part 5 cl 134 Electricity Industry Bill employee that is recognised by the Electricity Commis- sion as continuous service, is to be treated as a period of service with the Authority.
(3) To avoid doubt, the employment of a transferred employee by the Authority does not constitute new employment for the 5 purposes of the KiwiSaver Act 2006.
(4) A transferred employee is not entitled to receive any payment or benefit from the Electricity Commission or the Authority on the grounds that the person’s position in the Electricity Com- mission or Authority has ceased to exist, or the person has 10 ceased to be an employee of the Electricity Commission as a result of the transfer to the Authority, if— (a) (b) the employee is transferred to a suitable alternative pos- ition with the Authority; or the person is offered a suitable alternative position by 15 the Authority, the Commerce Commission, the Energy Efficiency and Conservation Authority, Transpower, or the Ministry, and— (i) the offer is made in the period between the date on which this Act receives the Royal assent and 20 the earlier of 1 December 2010 and the date on which the person’s employment with the Author- ity ceases; and the offer is made for employment that com- mences on or after the commencement date.
(ii) 25 Compare: 2008 No 47 Schedule 2 cl 31 134 Government Superannuation Fund (1) This section applies to every person who, immediately before the commencement date, was is an employee of the Electricity Commission.

(2) Nothing in this Act affects any entitlement under the Govern- ment Superannuation Fund Act 1956 of a person to whom this section applies.

This section is for the avoidance of doubt.


Compare: 2008 No 47 Schedule 2 cl 32 (3) 30 35 106 Electricity Industry Bill Part 5 cl 135 135 Complaints, investigations, etc (1) If, before the commencement date, any matter is referred to the Rulings Panel under the Electricity Governance Regulations 2003 (the Regulations), the procedures and remedies that ap- plied before the commencement date continue to apply as if 5 this Act were not in force.
If, before the commencement date, the Electricity Commission receives any complaint under the Regulations, the Authority must continue or complete the procedures required under this Act and the Regulations, and in accordance with the Code.

10 (2) (3) Any investigator appointed under the Regulations before the commencement date is for all purposes to be treated after the commencement date as having been appointed under the Regulations as amended by this Act.
(4) On and after the commencement date, complaints and disputes 15 relating to the electricity industry must be made and dealt with under this Act, even if the matter relates to activities before the commencement date.
135 Complaints, investigations, etc, transfer to Authority (1) On and from the commencement date, the Authority takes over 20 responsibility for dealing with every matter, such as a com- plaint about a breach, or possible breach, of the Code, or an investigation, that was before the Electricity Commission im- mediately before its disestablishment, provided the matter had not, before the commencement date, been referred to the Rul- 25 ings Panel (see section 137).
The processes, procedures, and rights of appeal set out in this Act and the regulations apply to— (a) (2) every matter referred to in subsection (1), as if the matter had arisen after the commencement date; and every such matter that is referred to the Authority after the commencement date and that concerns events that occurred before that date.
30 (b) (3) However, the only penalties that may be imposed in relation to a matter that arose, or events that occurred, before the com- 35 mencement date are the penalties that could have been im- posed at the time that the matter arose or events occurred.
107 Part 5 cl 135A Electricity Industry Bill 135A References to Electricity Governance Rules 2003 Unless the context otherwise requires, a reference in any agreement, contract, or other document to the Electricity Governance Rules 2003 or to any provision of those rules, or to the regulations listed in section 37(1) or any provision of 5 those regulations, must be read as a reference to the Code or to the corresponding provision of the Code, as the case requires.
Rulings Panel 136 Members of Rulings Panel (1) Every person who, immediately before this section comes into 10 force the commencement date, is a member of the Rulings Panel is to be treated as if he or she had been appointed as a member under section 27 in accordance with the regulations made under section 119.
(1A) However, despite section 29(3), the terms and conditions (in- 15 cluding remuneration) of a member of the Rulings Panel to whom subsection (1) applies remain the same after the com- mencement date as before it, unless and until the member’s appointment ends and he or she is reappointed as a member.

The chairperson and deputy chairperson of the Rulings Panel 20 is are to be treated as if he or she they had been appointed under section 27(2).
(2) 137 Work of Rulings Panel (1) All proceedings, disputes, or other matters before the Rulings Panel immediately before the commencement date must con- 25 tinue as if this Act and the amendments made by this Act to the Electricity Governance Regulations 2003 had not been made.
(1) All proceedings, appeals, disputes, or other matters before the Rulings Panel immediately before the commencement date must be dealt with as if this Act had not been enacted and as 30 if the Electricity Governance Regulations 2003 were still in force.

(1A) All matters that are referred to, or otherwise come before, the Rulings Panel after the commencement date must be dealt with under this Act and the regulations, subject to section 135(3).
35 (2) Nothing in this Act— 108 Electricity Industry Bill Part 5 cl 139 (a) (b) affects or renders invalid invalidates any order made by the Rulings Panel before the commencement date; or affects any appeal that is or may be brought against, or relating to, a determination or order of the Rulings Panel.
5 Commerce Commission 138 Investigations relating to separation of distribution from generation and retailing (1) After the commencement date, the Commerce Commission may continue any existing, and commence new, investigations 10 and proceedings in relation to a breach or possible breach of the Electricity Industry Reform Act 1998, as if that Act had not been repealed, but only if the Commerce Commission has, before the commencement date, confirmed in writing to a party to the investigation or proceedings that the investigation or 15 proceeding has begun.
(1A) Any breach or possible breach of the Electricity Industry Re- form Act 1998 that is not referred to the Commerce Commis- sion before the commencement date may be referred after that date to the Authority, in which case subpart 2 of Part 3 of 20 this Act applies to the breach or possible breach.
The Commerce Commission may must, on request by the Au- thority, provide to the Authority any information it holds that the Authority considers is, or may be, relevant to, a breach or possible breach of Part 3 of this Act.
(2) 25 139 Exemptions granted under Electricity Industry Reform Act 1998 (1) Any exemption granted by the Commerce Commission under the Electricity Industry Reform Act 1998 from an obligation under that Act continues in force, until it is revoked or expires, 30 as if it was granted by the Authority under this Act in respect of any corresponding obligation under this Act.
The Authority must include any exemption that is continued in force by this section in the list of exemptions that it is required to make publicly available under section 92(6).
(2) 35 109 Part 5 cl 139A Electricity Industry Bill 139A Levies must provide for Commerce Commission preparation costs to be recovered The amount of any levy specified in regulations made under section 53ZE of the Commerce Act 1986 (which are about levies payable to the Commerce Commission by suppliers of 5 regulated goods or services) must include an amount repre- senting the costs incurred by the Commission between 1 Janu- ary 2010 and the commencement date in preparing to imple- ment its new functions under sections 54R and 54S of the Commerce Act 1986 (as inserted by section 148 of this Act).
10 Subpart 4—Amendments to other enactments Amendments to Commerce Act 1986 140 Amendments to Commerce Act 1986 Sections 141 to 150 149 amend the Commerce Act 1986.

15 141 (1) (2) Interpretation Section 2(1) is amended by inserting the following definition in its appropriate alphabetical order: “Authority means the Electricity Authority established under the Electricity Industry Act 2009”.

Section 2(1) is amended by repealing the definition of Electri- city Commission.
20 142 Matters covered by input methodologies (1) Section 52T(1)(b) is amended by inserting after “methodolo- gies” “, except where pricing methodologies are set out in re- 25 lation to particular goods or services that are subject to regu- lation by an industry-specific regulator (such as the Electricity Authority)”.
Section 52T(1)(b) is amended by inserting “, except where an- other industry regulator (such as the Electricity Authority) has 30 the power to set pricing methodologies in relation to particular goods or services” after “methodologies”.

110 Electricity Industry Bill Part 5 cl 144 142A Commission’s costs in setting customised price-quality (1) (2) (3) path The heading to section 53Y is amended by omitting “in set- ting” and substituting “relating to assessing, setting, and re- considering”.
Section 53Y(1) is amended by omitting “setting” and substi- tuting “assessing a proposal for, and setting or reconsidering,”.
Section 53Y is amended by inserting the following subsection after subsection (1): 5 “(1A) If the amount paid by a person in respect of a proposal for a 10 customised price-quality path exceeds the Commission’s costs in assessing the proposal and (if applicable) setting or recon- sidering the customised price-quality path, the Commission may refund the excess to the person who paid it.” 143 Interpretation for subpart Section 54B is amended by adding the following subsection as subsection (2): “(2) References in this subpart to Transpower include references to Transpower in its role as system operator under the Electri- city Industry Act 2009.” 144 Meaning of electricity lines services (1) Section 54C is amended by repealing subsection (1) and sub- stituting the following subsection: In this subpart, unless the context otherwise requires, electri- city lines services means— “(a) means the conveyance of electricity by line in New “(1) 15 20 25 Zealand; and “(b) with respect to services performed by Transpower, in- cludes services performed as system operator.” (2) Section 54C is amended by inserting the following subsection 30 after subsection (2): “(2A) However, despite anything in subsection (2), the supply of electricity from an alternative source in order to comply with section 107 of the Electricity Industry Act 2009 is to be treated as a supply of electricity lines services.” 35 111 Part 5 cl 145 Electricity Industry Bill (3) The definition of associate in section 54C(4) is amended by omitting “section 12 of the Electricity Industry Reform Act 1998” and substituting “section 75 of the Electricity In- dustry Act 2009”.
(2) 145 Definition of consumer-owned (1) 5 Section 54D(1)(a) is amended by omitting “section 3 of the Electricity Industry Reform Act 1998” and substituting “clause 6 of Schedule 2 of the Electricity Industry Act 2009”.
Section 54D(1) is amended by repealing paragraph (b) and 10 substituting the following paragraph: “(b) the trustees of each customer trust or community trust, or the committee of shareholders of each customer co-operative, as the case may be, that is referred to in paragraph (a) are elected by the persons who are 15 consumers of the supplier in accordance with subsec- tions (2A) to (2C); and”.
(3) Section 54D is amended by inserting the following subsections after subsection (2): “(2A) The requirements in respect of elections for the purposes of 20 subsection (1)(b) are as follows: “(a) “(b) every trustee of the customer trust or community trust, or every member of the committee of shareholders of each customer co-operative, as the case may be, must have been elected solely by the persons who are con- 25 sumers of the supplier; and either— “(i) at least 90% of the persons who are consumers of the supplier at the time of the election are eligible to vote in those elections; or in the case of a customer trust or community trust, there is ward-based voting that complies with the requirements of subsection (2B); and “(ii) 30 “(c) “(d) each consumer must have an equal vote.
if a casual vacancy arises between elections, an election 35 must be held or the position left vacant until the next scheduled election.
112 Electricity Industry Bill Part 5 cl 145 “(2B) The requirements for ward-based voting are as follows: “(a) at least 90 % of the persons in a ward who are consumers of the supplier at the time of the election are eligible to vote in the election of all of the trustees of that ward; and 5 “(b) ward boundaries must provide for effective and fair rep- resentation of all consumers of the supplier, and in par- ticular,— “(i) the proportion of consumers in relation to the number of trustees of the relevant trust must be 10 approximately equal in each ward; and the wards must not be based on volume of elec- tricity supplied; and “(ii) “(c) ward boundaries must be reviewed in consultation with all consumers of the supplier.
15 “(c) ward boundaries must be reviewed periodically (at intervals determined by the Commission) in consult- ation with all consumers of the supplier.
“(2C) A trustee of a customer trust or community trust, or a member of the committee of shareholders of a customer co-operative, 20 as the case may be, must be treated as having been elected solely by the persons who are consumers of the supplier if the person— “(a) has been declared to be elected without an election in the case of a nominee at an election where the number 25 of nominations was equal to or less than the number of vacancies; or “(c) “(b) has been declared to be elected as the next-highest- polling candidate in the case where a higher-polling candidate at the election was unable to fill the elected 30 position; or has been declared to be elected by the remaining trustees or members following a casual vacancy that arose between elections, provided that— “(i) the person is the first person to have been so 35 elected since the last election at which consumers of the supplier voted; and 113 Part 5 cl 146 Electricity Industry Bill “(ii) the person is elected to hold office only until the next scheduled election at which consumers of the suppliers will vote.” “(2D) The Commerce Commission may require a supplier that claims to meet the criteria in this section to verify that claim 5 by statutory declaration.
“(2E) The declaration must be made by the persons and in the form required by the Commerce Commission.” 146 How exempt status can be lost and default/customised price-quality regulation can be applied to consumer-owned suppliers 10 (1AA) Section 54H is amended by inserting the following subsec- tion after subsection (2): “(2A) A supplier must give notice in writing to the Commission (1) within 10 working days after becoming aware that it has 15 ceased to be consumer-owned.” Section 54H(3) is amended by repealing paragraphs (a) to (c) and substituting the following paragraphs: “(a) 15% of the persons who are domestic consumers of the supplier as at the date of the petition who are eligible 20 to vote in elections for trustees of the customer trust or community trust, or for members of the committee of shareholders of the customer co-operative: “(b) 20% of the persons who are domestic consumers of the supplier as at that date who are not eligible to vote in 25 elections for trustees of the customer trust or commu- nity trust, or for members of the committee of share- holders of the customer co-operative: 25% of the persons who are non-domestic consumers (either by number or by consumption of that class of 30 consumer) of the supplier as at that date.” “(c) (2) Section 54H is amended by inserting the following subclause subsection after subclause subsection (3): “(3A) In this section, domestic consumer has the same meaning as in section 5 of the Electricity Industry Act 2009.” 35 114 Electricity Industry Bill Part 5 cl 148 147 Administrative settlements with Transpower made before 1 April 2009 Section 54M(6) is repealed.
148 New heading and sections 54R and 54S substituted The heading above section 54R and sections 54R to 54U are 5 repealed and the following heading and sections substituted: “Transpower grid upgrades plans and capital expenditure proposals “54R Approval of Transpower’s grid upgrade plans and capital expenditure proposals 10 “(1) The role of the Electricity Commission in requesting or ap- proving grid upgrade plan proposals by Transpower is trans- ferred to the Commerce Commission on the commencement date.
“(2) Subsection (1) applies both to new proposals and to propos- 15 als that are under consideration by the Electricity Commission before the commencement date.
“(3) Until the input methodology required by section 54S is de- termined, when considering proposals for grid upgrades the Commerce Commission— “(a) must apply the grid investment test set out in Part F of the Electricity Governance Rules 2003 (as immediately before their revocation by this Act); and “(b) need not repeat processes already undertaken by the Electricity Commission.
“(4) The Commission may amend any administrative settlement with Transpower that is referred to in section 54M to give ef- fect to the policy stated in subsection (1); but subsection (1) takes effect on the commencement date whether or not an administrative settlement has been amended.
“(5) To avoid doubt, nothing in this section affects the transfer from the Electricity Commission to the Authority of all other roles relating to transmission, such as setting grid reliability stand- ards and the transmission pricing methodology.
20 25 30 “(2) Subsection (1) applies both to proposals made on and after 35 the commencement date and to any proposals that were re- 115 Part 5 cl 148 Electricity Industry Bill quested or under consideration by the Electricity Commission before the commencement date.
“(3) Until the input methodology required by section 54S is de- termined and published under section 52W,— “(a) Transpower must comply with Part F of the Electricity 5 Governance Rules, as that Part relates to grid upgrade plan proposals; and “(b) when considering grid upgrade plan proposals, the Commission— “(i) must apply, with any necessary modifications, the 10 grid investment test set out in Schedule F4 of Part F of the Electricity Governance Rules; and “(ii) must apply, with any necessary modifications, those parts of section III of Part F of the Electri- city Governance Rules that relate to the process 15 for approving grid upgrade plans (which includes rules 12 to 15 and 17.2); and “(iii) need not repeat any processes already undertaken by the Electricity Commission or undertake any processes that the Electricity Commission would 20 have been required to undertake.
“(4) To avoid doubt,— “(a) subsection (1) takes effect on the commencement date whether or not any administrative settlement between the Commission and Transpower has been amended to 25 reflect the transfer referred to in that subsection; and “(b) nothing in this section affects the transfer from the Elec- tricity Commission to the Electricity Authority of all other roles relating to transmission, such as setting grid reliability standards and the transmission pricing meth- 30 odology.
“(5) The Commission may change any timetables previously agreed for consultation on, and approval of, grid upgrade plan proposals, but must first consult Transpower on any timetable changes.
35 “(6) To facilitate the transfer of roles referred to in subsection (1), the Electricity Authority must give the Commission copies of all information it holds regarding grid upgrade plan proposals 116 Electricity Industry Bill Part 5 cl 148 “(7) that were under consideration by the Electricity Commission before the commencement date.
In this section,— “commencement date means 1 October 2010 “Electricity Governance Rules means the Electricity Gov- 5 ernance Rules 2003 as they were immediately before their revocation by the Electricity Industry Act 2009 “grid upgrade plan has the meaning set out in the Electricity Governance Rules.
“54S Commerce Commission to prepare input methodology for 10 grid upgrade plans and capital expenditure proposals “(1) The Commerce Commission must determine an input meth- odology for Transpower’s grid upgrade plans and capital ex- penditure proposals.
“(2) The input methodology must include— 15 “(a) “(b) “(c) requirements that must be met by Transpower, includ- ing the scope and specificity of information required, the extent of independent verification and audit, and the extent of consultation and agreement with consumers; and the criteria the Commerce Commission will use to evaluate grid upgrade plans and capital expenditure proposals; and time frames and processes for evaluating grid upgrade plans and capital expenditure proposals, including what 25 happens if the Commerce Commission does not comply with those time frames.
20 “(3) The input methodology must be determined no later than 1 Oc- tober 2011; but the Minister may, on the written request of the Commerce Commission, extend the deadline once by a period 30 of up to 3 months, in which case notice of the extension must be given in the Gazette.

“(4) Subpart 3 of Part 4 applies to the input methodology as if it were an input methodology referred to in section 52T, except as provided in subsection (2) or (3) of this section.
“Compare: 1986 No 5 ss 52T(1)(d), 52U” 35 117 Part 5 cl 149 Electricity Industry Bill 149 New section 54V substituted Section 54V is repealed and the following heading and section and heading are substituted: “Interface with Electricity Industry Act 2009 “54V Impact of certain decisions made under Electricity 5 Industry Act 2009 “(1AA) The Electricity Authority must consult with the Commis- sion before amending the Electricity Industry Participation Code (the Code) in a manner that will, or is likely to, affect the Commission in the performance of its functions or exercise of 10 its powers under this Part.
“(1) The Electricity Authority must advise the Commerce Com- mission as soon as practicable after doing any of the follow- ing things that is likely to be relevant to the powers, duties, or functions of the Commerce Commission under this Part: “(a) making any provision of the Code; or: “(b) making any decision under the Code; or: “(c) “(d) giving a direction to Transpower and 1 or more industry issuing any guidelines; or : 15 participants to enter into 1 or more transmission agree- 20 ments under section 47 of the Electricity Industry Act 2009.
“(1A) The Electricity Authority must advise the Commission, as soon as practicable, following any change in the Code that re- sults in increased costs to Transpower or to any distributor or 25 class of distributors.
“(2) The Commerce Commission must take into account, before exercising any of its powers or performing any of its duties or functions under this Part,— “(a) any provision of the Code, or decision made under it, 30 that relates to or affects the quality standards or pricing methodologies or performance requirements applicable to Transpower: any provision of the Code, or decision made under it, that relates to or affects the pricing methodologies ap- 35 plicable to any other line owner: any guidelines of which it receives advice under sub- section (1)(c) that are likely to be relevant to the exer- “(b) “(c) 118 Electricity Industry Bill Part 5 cl 151 “(d) “(e) “(f) cise of the powers or performance of the duties or func- tions of the Commerce Commission under this Part: any directions of which it receives advice under sub- section (1)(d): the levy payable by Transpower or any other line owner 5 under section 125 126 of the Electricity Industry Act 2009: the continuance of supply obligations imposed by sub- part 4 of Part 4 section 107 of the Electricity In- dustry Act 2009.
10 “(3) The Commerce Commission must, if asked by the Electricity Authority to do so, reconsider a section 52P determination and, to the extent that the Commerce Commission considers it ne- cessary or desirable to do so, amend the determination, to take account of any matter referred to in subsection (2).

“(4) The Commerce Commission may include in a section 52P de- termination relating to price-quality regulation for Transpower only the quality standards set by the Authority for Transpower.
“(4) Requirements relating to quality standards for Transpower in 15 a section 52P determination must be based on, and be consis- 20 tent with, quality standards for Transpower that are set by the Electricity Authority; but the Commission may prescribe them in any way it considers appropriate, as authorised by section 53M(3).” 150 Regulations Section 108 is amended by inserting the following paragraph after paragraph (cb): “(cc) authorising the Commerce Commission to refund a part of an application fee for a customised price-quality path proposal paid by a person under section 53Q(2)(c):”.
25 30 Amendments to Energy (Fuels, Levies, and References) Act 1989 151 Amendments to Energy (Fuels, Levies, and References) Act 1989 Sections 152 and 153 amend the Energy (Fuels, Levies, and 35 References) Act 1989.

119 Part 5 cl 152 Electricity Industry Bill 152 Part 2 repealed Part 2 is repealed.

153 Purpose of levies Section 14(1)(c) is amended by adding inserting “or gas re- tailers (as defined in section 2(1) of the Gas Act 1992)” after 5 “Electricity Act 1992)”.
Amendments to Electricity Act 1992 154 Amendments to Electricity Act 1992 Sections 155 to 157 amend the Electricity Act 1992.

154A Purposes 10 Section 1A is amended by repealing paragraph (b).
155 Interpretation Section 2(1) is amended by repealing the definition of elec- trical installation and substituting the following definition: “electrical installation means all fittings (other than electrical 15 appliances) that form part of a system for storing or conveying electricity— “(a) between a point of supply and any point in the system at which electricity conveyed through it may be con- sumed; or if the system is not connected to a supply of electricity via a point of supply, between (and including) any gen- erators and any point in the system at which electricity conveyed through it may be consumed “(b) 20 25 “electrical installation— “(a) means— “(i) in relation to a property with a point of supply, all fittings beyond the point of supply that form part of a system that is used to convey electricity to a point of consumption, or used to generate or 30 store electricity; and in relation to a property without a point of supply, all fittings that form part of a system that is used “(ii) 120 Electricity Industry Bill Part 5 cl 157 to convey electricity to a point of consumption, or used to generate or store electricity; but “(b) does not include any of the following: “(i) “(ii) an electrical appliance: any fittings that are owned or operated by an elec- 5 tricity generator and that are used, designed, or intended for use in or in association with the gen- eration of electricity, or used to convey electri- city from a source of generation to distribution or transmission lines: 10 “(iii) any fittings that are used, designed, or intended for use in or association with the conversion, transformation, or conveyance of electricity by distribution or transmission lines”.
156 New section 43A inserted (1) The following section is inserted after section 43: “43A Different Ministries responsible for different codes “(1) 15 In order to allow electrical codes of practice to be administered by the most appropriate Ministry, all Ministers responsible for the administration of any provision of this Act must, by agree- 20 ment from time to time, identify which particular codes, or codes relating to particular matters, are to be administered by which Ministry (referred to in this section as the responsible Ministry).
In sections 36 and 37 and 39 to 42, in relation to a code, Sec- 25 retary means the Secretary of the responsible Ministry.

In sections 38, 40, and 42, in relation to a code, Minister means the Minister for the time being responsible for the re- sponsible Ministry.” Section 40(7) is consequentially amended by omitting “means 30 the chief executive of the Ministry, and”.
“(2) “(3) (2) 157 Consequential amendments and repeal of spent provisions Section 2(1) is amended by repealing the following def- (1) initions: Commission, Commission’s board or board, community trust, Council, customer trust, domestic 35 consumer, domestic premises, electricity governance 121 Part 5 cl 158 Electricity Industry Bill regulations, GPS objectives and outcomes, industry par- ticipant, national grid, performance standards, publicise, report date, reporting period, reserve energy, rules and electricity governance rules, Rulings Panel, and electricity governance rules Transpower.
Part 5 is repealed.

Section 62 is repealed.

The heading above section 158A and the heading above sec- tion 158G, and sections 158A to 158G, are repealed.

Subpart 2 of Part 14 is repealed.

Part 15 is repealed.

Section 177 is repealed.

5 10 (2) (3) (4) (5) (6) (7) Repeal of Electricity Industry Reform Act 1998 158 Repeal of Electricity Industry Reform Act 1998 The Electricity Industry Reform Act 1998 (1998 No 88) is 15 repealed.
Amendments to other enactments 159 Amendments to other enactments The enactments specified in Schedule 5 are consequentially amended in the manner set out in that schedule.
20 122 Electricity Industry Bill Schedule 1 1 Schedule 1 Material incorporated by reference ss 35(4), 120(5), 121(4) Definitions In this schedule, unless the context otherwise requires,— Agency means the Authority or the Ministry, as the case re- 5 quires main document means the Code or regulations made under this Act section 120 or 121, as the case requires material means written material set out in a document other than the main document responsible person means the chairperson of the Authority or the chief executive of the Ministry, as the case requires.
10 Material incorporated by reference into main document 2 (1) Material may be incorporated by reference into the main docu- ment only if— (a) (b) 15 the material deals with technical matters; and in the opinion of the Agency,— (i) the material is too long to publish in the main document; or it is otherwise impractical to publish the material 20 in the main document.
(ii) (2) Material may be incorporated by reference into the main docu- ment— (a) (b) with any modifications, additions, or variations speci- 25 in whole or in part; and fied in the main document.

(3) Material incorporated by reference— (a) (b) is the material as it exists at the time the relevant provi- sion of the main document is published; and has legal effect as part of the main document for all 30 purposes, except as provided in clauses 7 and 8.
Proof of material incorporated by reference 3 (1) A copy of any material incorporated by reference in into the main document must be— (a) certified by the responsible person as a correct copy of 35 the material; and 123 Schedule 1 Electricity Industry Bill (2) 4 (1) (2) retained by the Agency.

(b) The production in proceedings of a certified copy of the mater- ial is, in the absence of evidence to the contrary, sufficient evi- dence of the incorporation of the material into the main docu- ment.
Access to material incorporated by reference The Agency must make copies of all material incorporated by reference publicly available, and must give notice in the Gazette of how the material is available for inspection and purchase.

Subclause (1) applies to material when it is first incorporated into the main document, and to any subsequent amendment or replacement of the material that is incorporated into the deter- mination main document.
5 10 (3) A failure to comply with this clause does not invalidate the 15 main document or any part of it.
Power to give effect to amendments to, or replacements of, material Legal effect may be given to an amendment to, or replacement of, material incorporated by reference in into the main docu- 20 ment if— (a) the amendment or replacement material is made by the person or organisation that made the original material; and the amendment or replacement material is of the same 25 general character as the original material; and the Agency, by notice in the Gazette, adopts the amend- ment or replacement material as having legal effect as part of the main document.
(b) (c) Effect of expiry of material incorporated by reference Material incorporated by reference in into the main document that expires, is revoked, or ceases to have effect, ceases to have legal effect as part of the main document only if— (a) an amendment to the main document states that the ma- terial ceases to have that legal effect; or 30 35 5 6 124 Electricity Industry Bill Schedule 1 7 8 (b) the Agency, by notice in the Gazette, states that the ma- terial ceases to have that legal effect.
Acts and Regulations Publication Act 1989 not applicable The Acts and Regulations Publication Act 1989 does not apply to material incorporated by reference in into the main docu- 5 ment, or to any amendment to, or replacement of, the material.
Application of Regulations (Disallowance) Act 1989 not applicable The Regulations (Disallowance) Act 1989 does not apply, ex- cept section 4, applies to material incorporated by reference in 10 the main document, or to any amendment to, or replacement of, the material.
125 Schedule 2 Electricity Industry Bill Schedule 2 When person is involved in distributor, generator, or retailer for purposes of Part 3 Contents s 76 ss 75, 76, 96 Involvements that do not count for purposes of separation rules in Part 3 Purpose of this schedule Interests in distributors that are too small to count for purposes of Part 3 Interests in generators that are too small to count for purposes of Part 3 Other interests that are not counted for purposes of Part 3 Interpretation of terms used in definition of “involved in” Meaning of control rights Meaning of equity return rights Meaning of material influence Meaning of associate Substance matters, not form, for purposes of determining level of involvement Other interpretation for purposes of separation rules Exclusions, etc, are cumulative Page 126 126 127 128 129 130 131 132 133 134 134 Involvements that do not count for purposes of separation rules in Part 3 Purpose of this schedule The purpose of this schedule is— (a) to exclude certain interests from the application of the separation rules in Part 3; and to help in interpreting those rules.
(b) Interests in distributors that are too small to count for purposes of Part 3 No account is to be taken, for the purpose of determining under Part 3 whether a person is involved in a distributor, of any of the following: 5 10 15 126 Electricity Industry Bill Schedule 2 (a) (b) (c) (d) (e) (f) lines that are not connected, directly or indirectly, to the national grid (for example, certain lines in Haast, the Chatham Islands, and Stewart Island): the conveyance of electricity only from a generator to the national grid or from the national grid to a generator: 5 the conveyance of less than 5 GWh per financial year: the conveyance of electricity solely for the consumption of a person who is involved in the distributor or for the consumption of any of the distributor’s associates: the conveyance of electricity (other than via the national 10 grid) only from a generator to a network or from a net- work to a generator: the conveyance of electricity mostly in competition with another line or lines operated by another electri- city business that is not an associate of a person who is 15 involved in the first line, provided that the competition is actual competition and not potential competition.
Compare: 1988 No 234 s 6; 1998 No 88 s 19 3 Interests in generators that are too small to count for purposes of Part 3 No account is to be taken, for the purpose of determining under Part 3 whether a person is involved in a generator, of any of the following interests: (a) an interest in an irrigation scheme, where— (i) 20 that scheme is physically connected to a gener- 25 ator or core generation assets and was built and is operated primarily for the purpose of irrigation; and that person does not hold, through the person’s interest in the scheme, any equity return rights 30 or control rights in, or manage or operate, the generator or core generation assets; or (ii) (b) an interest in a business that generates electricity from a geothermal energy source if— (i) the geothermal plant was commissioned between 35 1 January 1998 and 1 January 2009, and is cur- rently owned by the person that commissioned it; and 127 Schedule 2 Electricity Industry Bill (ii) the output from the geothermal plant is less than 12 MW (determined according to nameplate or nameplates); or (c) the generation of electricity that does not have a total annual nominal capacity greater than 5 GWh per year 5 (determined according to nameplates nameplate).
Compare: 1988 No 234 s 6; 1998 No 88 s 19 4 Other interests that are not counted for purposes of Part 3 (1) No account is to be taken, for the purposes of Part 3, of a person’s business, or involvement or interest in a business, or 10 involvement if— (a) the business, involvement, or interest or involvement is exempted by the Authority under section 92; or the ordinary business of the person consists of, or in- cludes, the lending of money, and that person has the 15 involvement or interest only as security given for a loan or guarantee of a loan entered into in the ordinary course of the business of that person or as a result of enforcing that security; or that person has the involvement or interest by reason 20 only of acting for another person to acquire or dispose of a security on behalf of the other person in the ordinary course of business of a sharebroker and that person is a person authorised to undertake trading activities on a stock exchange; or that person— (i) 25 has the involvement or interest by reason only that he or she has been authorised by resolution of the directors or other governing body of a body corporate to act as its representative at a meeting 30 or meetings of members, or a class of members, of another person; and has no discretion to determine how to represent the body corporate at the meeting or meetings; or (ii) that person— (i) has the involvement or interest solely by reason of being appointed as a proxy to vote at a meeting 35 (b) (c) (d) (e) 128 Electricity Industry Bill
 Schedule 2 (ii) or meetings of members, or of a class of mem- bers, of another person; and has no discretion to determine how the proxy should be exercised at the meeting or meetings; or 5 that person has the involvement or interest by reason only that the person is a bare trustee of a trust to which the involvement or interest is subject; or that person is involved only because the ordinary busi- ness of the person consists of or includes the selling 10 of core assets of an electricity business, and the person does not operate those assets; or that person has the involvement only because the person is an adviser or industry service provider.
(f) (g) (h) (2) For the purposes of subclause (1)(f), a trustee may be a bare 15 trustee despite the fact that he or she is entitled as a trustee to be remunerated from the income or property of the trust.

Compare: 1988 No 234 s 6; 1998 No 88 s 19 Interpretation of terms used in definition of “involved in” 20 5 (1) Meaning of control rights For the purposes of this Act, a control right means a voting right attaching to a voting security.
(2) A person has a control right if the person would have a relevant interest under sections 5 to 5B of the Securities Markets Act 25 1988, in the voting securities that confer that right,— (a) if voting security, in relation to a body, meant a secur- ity of the body that confers a right to vote at meetings of members (whether or not there is any restriction or limitation on the number of votes that may be cast by or 30 on behalf of the holder of the security), and includes a security that, in accordance with the terms of the secur- ity, is convertible into a security of that kind; and if references in those sections to a number or percentage of voting securities were a reference to the number or 35 percentage of the votes conferred by those securities.
(b) Compare: 1998 No 88 s 9 129 Schedule 2 Electricity Industry Bill 6 (1) (2) Meaning of equity return rights For the purposes of this Act, a person has an equity return right in relation to a business if the person has a right or en- titlement or expectancy to receive equity returns, directly or indirectly, of the business.

Equity returns means— (a) (b) (c) profits of the business; or distributions from the business; or other equity returns from the business, as defined in subclause (3).
(3) Other equity returns— (a) means a benefit derived, directly or indirectly, from a business that represents or is calculated by reference to or is determined by,— (i) (ii) a share in or proportion of its capital; or its surplus or residual economic value (after sat- isfying prior contractual claims); or its profitability or other indicator of its success; but (iii) 5 10 15 (b) to avoid doubt, does not include a right or entitlement to 20 interest on debt calculated at general market rates that prevail at the time of the loan agreement, or fluctuat- ing in accordance with a formula which applies general market rates prevailing from time to time.
(4) A person is deemed to have a percentage of the equity return 25 rights held by another person in a business if the first person has, or is 1 of 2 or more associates who together have, more than 10% of the equity return rights in the second person.
The percentage of rights held by a person in another person is calculated as follows: (5) 30 a = b x c where— a b c is the percentage to be determined is the percentage of the equity return rights held by the first person in the second person is the percentage of the equity return rights held by the second person in the business.
35 Compare: 1998 No 88 s 10 130 Electricity Industry Bill Schedule 2 Meaning of material influence 7 (1) Without limiting the ordinary meaning of the expression ma- terial influence, the following people are deemed to have ma- terial influence over an electricity a business: (a) (b) (c) (d) (e) (f) (g) (h) a director or manager of a person that carries on the 5 business: if the business is carried on by a natural person, that person: a person in accordance with whose directions, instruc- tions, or wishes a person referred to in either of para- 10 graph (a) or (b), or the business, may be required or is accustomed to act in respect of the carrying on or man- agement of the business: a person that exercises or that is entitled to exercise, or who controls or is entitled to control the exercise of, 15 powers that would ordinarily be exercised by a person referred to in either paragraph (a) or (b): a person that can appoint or remove, or control the ap- pointment or removal of, a person referred to in either paragraph (a) or (b): a person that has a power to influence a decision of the business that would ordinarily require the holding of control rights which would cause the person to exceed the 10% threshold: a person in circumstances where the person and the 25 business are acting, or proposing to act, jointly or in concert in relation to the business: a person that, under a trust or agreement (whether or not the person is a party to it), may at any time have any of the powers referred to in paragraph (c) to (f).
20 30 (2) Where a person has material influence over an electricity a business under this section, and another person has any of the powers or controls referred to in subclause (1)(c) to (h) in relation to the first person or the majority of its directors or managers, then that other person is deemed also to have ma- 35 terial influence over the business, and so on.
(3) A person is deemed to have material influence over an electri- city a business if the person is 1 of 2 or more associates who, together, have material influence over the business.
131 Schedule 2 Electricity Industry Bill 5 10 Subclause (3) does not apply to deem a person to have mater- ial influence over a business only because that person is, under clause 8(1)(b), an associate of another person, provided those associates act in accordance with the arm’s-length rules (with all necessary modifications) in respect of the business.

To avoid doubt, a power to cast one of many votes at an elec- tion of trustees or councillors does not, of itself, constitute ma- terial influence.
Compare: 1998 No 88 s 11 Meaning of associate For the purposes of this Act, person A is an associate of person B (and vice versa) if— (a) person A is a body corporate, and person B is— a director of that body corporate; or (i) a related body corporate of that body corporate 15 (ii) (within the meaning of section 5B(2) of the Se- curities Markets Act 1988); or a director of a related body corporate of that body corporate (within that same meaning); or (iii) (b) (c) (d) (e) (f) person A is a spouse, civil union partner, de facto part- 20 ner, child, or parent of person B; or person A is a partner, to whom the Partnership Act 1908 applies, of person B; or person A is a limited partnership or an overseas limited partnership and person B is a general partner or a limited 25 partner who takes part in the management of the limited partnership (within the meaning of the Limited Partner- ships Act 2008); or person A is a nominee or trustee for person B in relation to interests in a business; or person A is a director of a company, or holds more than 10% of the control rights in the company, and person A and person B are parties to an agreement relating to— (i) (ii) more than 20% of the control rights in that com- 35 the control of that company; or 30 pany; or (4) (5) 8 (1) 132 Electricity Industry Bill Schedule 2 (g) (h) person A and person B are acting, or propose to act, or are likely to act, jointly or in concert in relation to a business; or person A is a person who, in making a decision or exer- cising a power materially affecting a business, is accus- 5 tomed, or under an obligation, or proposes, or is likely, to act in accordance with the directions, instructions, or wishes of person B.
(2) References in subclause (1)(e) to (h) to a company or busi- ness relate to a company or business in respect of which a con- 10 nection with an electricity a business is relevant.
Compare: 1998 No 88 s 12 9 Substance matters, not form, for purposes of determining level of involvement (1) Without limiting section 76, a person may be involved in an 15 electricity a business, or be an associate or agent, regardless of whether a right, influence, power, obligation, or agreement is— (a) (b) (c) (d) (e) expressed or implied: direct or indirect: legally enforceable: related to a particular control right: subject to restraint or restriction or is capable of being made subject to restraint or restriction: exercisable presently or in the future: exercisable only on the fulfilment of a condition: exercisable alone or jointly with another person or per- sons.
(f) (g) (h) 20 25 (2) A power, influence, or ability exercisable jointly with another person or persons is deemed to be exercisable by either or any 30 of those persons.

(3) A reference to a power or obligation includes a reference to a power, influence, ability, or requirement that arises from, or is capable of being exercised or required as a result of, a breach of any trust or agreement whether or not it is legally enforceable.
35 Compare: 1988 No 234 s 5(4)–(6); 1998 No 88 s 14(2)–(4) 133 Schedule 2 Electricity Industry Bill Other interpretation for purposes of separation rules For the purposes of Part 3, Schedule 2, and this schedule Part 3, this schedule, and Schedule 3, unless the context otherwise requires,— agreement includes a deed, a contract, an agreement, an ar- 5 rangement, and an understanding, whether oral or written, ex- press or implied, and whether or not enforceable at law expectancy means, in relation to a business or any other per- son,— (a) an expectancy or a contingent or unvested right to 10 equity returns of the business or person; or a right to equity returns of the business or person which does not confer on the holder a certain or defined share of the equity returns available to all or to any class of persons having equity return rights in the business or 15 person: (b) manager, in relation to a person,— (a) means a person who, whether alone or jointly with any other person, manages, or directs or supervises the man- agement of, the whole or a substantial part of the busi- 20 ness and affairs of the person; and includes, to avoid doubt,— (i) (ii) does not include,— (i) in relation to a trust, a trustee: in relation to a local authority, a member; but (b) (c) 25 in relation to a body corporate, a director of that body corporate: in relation to an electricity a business in which a local authority or any other person has an interest, a member of that local authority or manager of 30 that person only as a result of that person having that position.
(ii) Compare: 1998 No 88 s 3(2) Exclusions, etc, are cumulative In relation to this schedule,— (a) limitations, exclusions, or exemptions under any clause may be applied cumulatively; and 35 10 11 134 Electricity Industry Bill Schedule 2 (b) references to an activity being carried out only or solely for a particular purpose or in a particular way, or to a person having an involvement or interest only or solely for a particular reason, must not be read as excluding re- liance on any other limitation, exclusion, or exemption 5 in any of those clauses.
Compare: 1998 No 88 s 3(3) 135 Schedule 3 Electricity Industry Bill Schedule 3 Arm’s-length rules Contents Objective Interpretation Arm’s-length rules Rules do not limit objective These duties are additional to other duties ss 75, 78 Page 136 136 137 141 142 Objective The objective of this schedule is to ensure that businesses to which section 78 apply operate at arm’s length.
1 1A 2 3 5 1 (1) (2) Without limiting the ordinary meaning of the expression, 5 arm’s length includes having relationships, dealings, and transactions that— (a) do not include elements that parties in their respective positions would usually omit; or; and do not omit elements that parties in their respective pos- 10 itions would usually include,— (b) if the parties were— (c) connected or related only by the transaction or dealing in question; and acting independently; and each acting in its own best interests.
15 (d) (e) 1A Interpretation (1) In this schedule,— business A means a business that is required to be carried out in 1 company under section 78 and the term business B then 20 refers to a business that is required to be carried out in another company under that section common parent, in relation to business A and business B, means a person that is involved in both business A and busi- ness B electricity trust means a community trust or a customer trust or a customer co-operative 25 136 Electricity Industry Bill Schedule 3 (2) parent, in relation to a business, means every person that is involved in the business.
In this schedule, a person is interested in a transaction if the person, or an associate of that person,— (a) is a party to, or will derive a material financial benefit 5 from, the transaction; or has a material financial interest in a party to the trans- action; or is a director or manager of a party to, or a person who will or may derive a material financial benefit from, the 10 transaction; or is otherwise directly or indirectly materially interested in the transaction.
(b) (c) (d) (3) Where this schedule applies to business A, it applies equally (4) to business B, and vice versa.

References to trust A and trust B have corresponding meanings and application.

15 2 1 2 3 Arm’s-length rules The arm’s-length rules are as follows: Duty to ensure arm’s-length objective is met 20 Business A and every parent of business A, and business B and every parent of business B, must take all reasonable steps to ensure that the arm’s-length objective in clause 1 is met.
Arm’s-length test Business A, and every parent of business A, must not enter into 25 a transaction in which business B, or any parent of business B, is interested if the terms of the transaction are terms that un- related parties in the position of the parties to the transaction, each acting independently and in its own best interests, would not have agreed to.
30 Duty not to prefer interests of business B A director or manager of business A must not, when exercising powers or performing duties in connection with business A, 137 Schedule 3 Electricity Industry Bill act in a manner that the director or manager knows or ought reasonably to know would prefer the interests of business B over the interests of business A.
Duty not to discriminate in favour of business B Business A must not, in providing services or benefits, dis- 5 criminate in favour of business B or the customers, suppliers, or members of business B.
Duty to focus on interests of right ultimate owners A director or manager of business A must, when exercising 10 powers or performing duties in connection with business A, act in the interests of the ultimate members of business A in their capacity as such, and must neither subordinate the interests of those members to the interests of the members of business B nor, to the extent that the members or ultimate beneficial 15 members of each business overlap, take account of that fact or have regard to their dual capacity as members of business B and business A.
Duty of directors and managers of parents of business A 20 A director or manager of a parent of business A must not, when exercising powers or performing duties in connection with business A, act in a manner that the director or manager knows or ought reasonably to know would prefer the interests of business B, or of the customers, suppliers, or members of 25 business B in that capacity, over the interests of business A or the customers, suppliers, or members of business A.
At least 1 independent director 2 independent directors At least 1 director 2 directors of business A must— (a) (b) be neither a director nor a manager of business B; and not be an associate of business B, other than by virtue of being a director of business A.
30 4 5 6 7 138 8 Electricity Industry Bill Schedule 3 No cross-directors who are executive directors A director of business A may be a director of business B, but must not— (a) manage business B on a day-to-day basis; or (b) be an associate of business B, other than by virtue of 5 being a director of business A or business B; or be involved in business B (other than by having material influence over business B by virtue of being a director of business B).
(c) Separate management rule 10 9(1) This clause applies if business A is involved in— (a) (b) a generator that has a total capacity of more than 30 50 MW and that is connected to any of business A’s networks; or a retailer that retails more than 250 75 GWh of electri- 15 city in a financial year to customers who are connected to any of business A’s networks.
(a) (b) (2) A manager of business A must not— be a manager of business B; or be an associate of business B, other than by virtue of 20 being a manager of business A; or be involved in the business of business B.
(c) Directors and managers must not be placed under certain obligations 10(1) Subject to subclause (2), no person may place the director or 25 manager of business A under an obligation, whether enforce- able or not, to act in accordance with the directions, instruc- tions, or wishes of business B, or any director or manager or associate of business B, or any parent of business B, and no director or manager may submit to any such obligation.
(2) A common parent, or a cross-director or a cross-manager, of both business A and business B may place a director or man- ager under an obligation referred to in subclause (1) if doing so does not contravene another of the arm’s-length rules.

30 139 Schedule 3 Electricity Industry Bill Restriction on use of information 11(1) Business A must not disclose or permit the disclosure to busi- ness B, or use or permit the use for the purposes of business B, of restricted information of business A.
An electricity trust that is a parent of business A (trust A), 5 business A, and every parent of trust A, must not disclose or permit the disclosure to business B, an electricity trust that is a parent of business B (trust B), or any parent of trust B, or use or permit the use for the purposes of business B or trust B, of restricted information of business A or trust A.
In these rules, restricted information is information received or generated, and held, by business A or trust A that is con- nected with its business, being information that— (a) is not available to the competitors or potential competi- tors of business B or trust B; and if disclosed to business B or trust B, would put, or be likely to put, business B or trust B in a position of ma- terial advantage in relation to any competitor or poten- tial competitor.
(b) 10 15 (2) This rule does not prevent cross-directors under rule 8 from 20 having access to normal board information.

(3) A manager of business A who is not prohibited from being a manager of business B under rule 9 may use restricted in- formation of both business A and business B, but only to the extent that the use does not contravene another of the arm’s- 25 length rules.
Records Every business to which this schedule applies must keep at its registered office a register of transactions entered into between business A, or any parent of business A, and business B, or any 30 parent of business B.

Business A must, within 10 working days of entering into any such transaction, enter in its register details sufficient to iden- tify the nature and import of the transaction.
12 13 140 14 15 3 4 (1) (2) Electricity Industry Bill Schedule 3 Practical considerations Business A and every parent of business A must ensure that its practical arrangements, such as use of accommodation, equip- ment, and services, do not contravene this schedule.

Business A and every parent of business A must ensure that 5 its selection and appointment of advisors does not prejudice compliance with rules 7 to 11.
Rules do not limit objective The arm’s-length rules in clause 2 do not limit the generality of the arm’s-length objective in clause 1.
10 Interpretation In this schedule,— business A means a business that is required to be carried out in 1 company under section 78 and the term business B then refers to a business that is required to be carried out in another 15 company under that section common parent, in relation to business A and business B, means a person that is involved in both business A and busi- ness B electricity trust means a community trust or a customer trust 20 or a customer co-operative parent, in relation to a business, means every person that is involved in the business.
In this schedule, a person is interested in a transaction if the person, or an associate of that person,— (a) 25 is a party to, or will derive a material financial benefit from, the transaction; or has a material financial interest in a party to the trans- action; or is a director or manager of a party to, or a person who 30 will or may derive a material financial benefit from, the transaction; or is otherwise directly or indirectly materially interested in the transaction.
(b) (c) (d) 141 Schedule 3 Electricity Industry Bill (3) Where this schedule applies to business A, it applies equally (4) 5 to business B, and vice versa.

References to trust A and trust B have corresponding meanings and application.

These duties are additional to other duties The requirements of this schedule are additional to the require- ments of any provisions of the Code or regulations made under this Act.
5 142 7A Electricity Industry Bill Schedule 4 Schedule 4 Dispute resolution scheme s 97(2)(3) Purpose of dispute resolution scheme Interpretation Approved scheme: approval and withdrawal of approval Meaning of approved scheme Application for approval Mandatory considerations for approval Minister must decide application for approval Decision must be notified and publicised Rules of approved scheme not to change without Ministerial approval Notice of intention to withdraw approval Objection to withdrawal of approval Withdrawal of approval Effect of withdrawal of approval Approved scheme: rules and obligations Rules of approved scheme List of members Independent 5-yearly review Annual report Provision of information Regulated scheme: appointment and revocation of appointment Appointment of regulated scheme Revocation of appointment as regulated scheme Notice of intention to revoke appointment Objection to recommendation to revoke appointment Page 143 144 144 144 145 146 146 146 147 148 148 148 149 150 150 151 151 151 152 153 153 Purpose of dispute resolution scheme The purpose of the dispute resolution scheme is to ensure that— (a) any person (including consumers, potential consumers, 5 and owners and occupiers of land, but excluding mem- bers of the scheme) who has a complaint about a mem- 143 Schedule 4 Electricity Industry Bill ber has access to a scheme for resolving the complaint; and the scheme is accessible, independent, fair, account- able, efficient, and effective.
(b) 5 the approved scheme: the regulated scheme Interpretation In this schedule, unless the context otherwise requires,— approved scheme has the meaning given in clause 3 dispute resolution scheme, at any time, means whichever of the following is in force under this schedule at the time: (a) (b) member, in relation to the dispute resolution scheme, means a person who is required to be a member of the dispute reso- lution scheme regulated scheme means the scheme appointed as the regu- 15 lated scheme under clause 17 responsible person means, in relation to a scheme, the person responsible for the scheme.
10 Approved scheme: approval and withdrawal of approval 20 Meaning of approved scheme The approved scheme is— (a) the complaints resolution scheme (if any) approved by the Electricity Commission under section 158G of the Electricity Act 1992, and the Minister under section 43E 25 of the Gas Act 1992 (provided the scheme’s approval has not been withdrawn); or the scheme approved by the Minister under clause 6 (provided the approval has not been withdrawn).
(b) Compare: 2008 No 97 s 50 Application for approval The responsible person of for a scheme may apply to the Min- ister for approval of the scheme as the approved scheme.

The application must include— (a) the rules of the scheme; and 30 35 2 3 4 (1) (2) 144 Electricity Industry Bill Schedule 4 (b) any other information that the Minister, by notice in the Gazette, prescribes as required to be included in an application under this clause; and the prescribed fee (if any).
(c) The Minister may ask an applicant to supply any further infor- 5 mation or documentation in support of the application.
Compare: 2008 No 97 s 51 (3) Mandatory considerations for approval 5 (1) When considering an application under clause 4, the Minister must have regard to the following considerations in light of the 10 principles listed in subclause (2): (a) whether the scheme is capable of meeting the purpose of the dispute resolution scheme as set out in clause 1: (b) whether the scheme has broad support among the per- (c) sons who are required to be members: whether the scheme is capable of dealing with a wide range of complaints by persons entitled to make a com- plaint: 15 (d) whether the scheme is an integrated scheme for the reso- (e) lution of complaints in both the electricity and gas in- 20 dustries: whether the applicant has adequate funding to enable it to operate the scheme according to its purpose and in accordance with its rules: whether the applicant’s directors and senior managers 25 are competent to manage a dispute resolution scheme: (g) whether the rules of the scheme are adequate and com- (f) ply with— (i) (ii) the principles listed in subclause (2); and the requirements of clause 12(1).
(2) The principles are— accessibility: (a) independence: (b) fairness: (c) accountability: (d) efficiency: (e) effectiveness.

(f) Compare: 2008 No 97 s 52 30 35 145 Schedule 4 Electricity Industry Bill Minister must decide application for approval 6 (1) After considering an application made under clause 4, the (2) approve the scheme as the approved scheme; or decline the application.
Minister may— (a) (b) The Minister may only decide whether to approve the scheme or decline the application after consulting— (a) (b) (ba) the Minister of Energy; and the Authority; and if an industry body is appointed under section 43ZL of 10 the Gas Act 1992, that industry body; and any persons (or their representatives) that the Minister considers are likely to be substantially affected by the approval.
(c) 5 (4) (3) A failure to consult with the persons referred to in clause 15 (2)(c) does not affect the validity of any approval of scheme.

The Minister may approve a scheme if there is already another approved scheme, but in that case the approval does not take effect until the approval of the other scheme is withdrawn.
Compare: 2008 No 97 s 53 20 7 Decision must be notified and publicised The Minister must, as soon as practicable after deciding an application,— (a) (b) notify the applicant of the decision; and if the decision is to approve the application, ensure that 25 the approval is publicised.

Compare: 2008 No 97 s 54 7A Rules of approved scheme not to change without Ministerial approval The rules of the approved scheme must not be changed unless 30 the Minister approves the change.
If the responsible person for the approved scheme notifies the Minister of a proposed rule change, the rule change is deemed to be approved by the Minister unless, within 45 days after the date of notification, the Minister declines approval.
35 (1) (2) 146 (3) 8 (1) (2) (3) Electricity Industry Bill Schedule 4 The Minister may decline approval for a rule change only on the grounds that, if the rules were changed as proposed, they would not comply with the principles listed in clause 5(2) or would not comply with clause 12.

Compare: 2008 No 97 ss 65, 66 5 Notice of intention to withdraw approval If the Minister proposes to withdraw approval for an approved scheme, the Minister must notify the responsible person.
The Minister’s notice must— (a) state that the Minister intends to withdraw the scheme’s 10 approval; and identify which of the grounds described in subclause (3) apply: state why the Minister considers those grounds apply; and identify the notice period, which must be at least 3 months, during which the responsible person may ob- ject, under clause 9, to the intended withdrawal.
15 The only grounds for withdrawing approval are as follows: (a) the scheme is not, or is no longer, capable of meeting 20 the purpose of the dispute resolution scheme as set out in clause 1: there has been a loss of broad support for the scheme: the scheme is no longer an integrated scheme for the resolution of complaints in both the electricity and gas 25 industries: there has been a failure to comply with the rules of the scheme: the responsible person has not publicised the rules as required by clause 12(2): the responsible person has not supplied the Minister with 1 or more of the following: (i) (ii) an annual report as required by clause 15: any further information requested by the Minister under clause 16: a report of an independent review as required by clause 14: (iii) 35 30 (b) (c) (d) (b) (c) (d) (e) (f) 147 Schedule 4 Electricity Industry Bill (4) (g) (h) the responsible person has not notified the Minister be- fore changing the rules of the scheme as required by clause 7A: the scheme no longer satisfies the principles in clause 5(2).
5 (b) The Minister’s notice may require the responsible person to— notify all members of the Minister’s intention to with- (a) draw the scheme’s approval; or provide the Minister with a list of the names and busi- ness addresses of current members so that the Minister 10 can, if the Minister wishes, notify all members of the Minister’s intention to withdraw the scheme’s approval.
Compare: 2008 No 97 ss 56, 57 Objection to withdrawal of approval 9 (1) During the notice period, the responsible person may object 15 (2) (with reasons) to the proposed withdrawal of approval.

The Minister must consider any objection that is received be- fore the end of the notice period.

Compare: 2008 No 97 s 58 10 Withdrawal of approval (1) If the Minister has given notice of intention to withdraw ap- proval, the Minister may withdraw the approval at any time after the expiry of the notice period.
20 (2) When considering whether to withdraw approval, the Minister must have regard to the considerations referred to in clause 25 5(1) in light of the principles listed in clause 5(2).

The Minister must withdraw the approval of an approved dis- pute resolution scheme if the responsible person so requests, in which case the scheme is no longer approved from the date that is 3 months after the date of withdrawal of approval.
Compare: 2008 No 97 s 56 30 Effect of withdrawal of approval On the date that the withdrawal of an approved scheme’s ap- proval takes effect, the members of the scheme become mem- bers of— 35 (3) 11 148 Electricity Industry Bill Schedule 4 (a) any other approved scheme that is approved with effect from that date; or the regulated scheme.
(b) Compare: 2008 No 97 s 61 Approved scheme: rules and obligations 5 12 (1) Rules of approved scheme The rules of the approved scheme must provide for, or set out, the following: (a) (iv) that any person (including consumers, potential con- sumers, and owners and occupiers of land, but exclud- 10 ing members of the scheme) may make complaints for resolution by the scheme: how complaints to be dealt with by the scheme may be made: the kinds of complaints that the scheme will deal with, 15 which must include— (i) (ii) (iii) breaches of contract; and breaches of statutory obligation; and in the case of a complaint relating to electricity, breaches of the Act, the regulations, the Code, or 20 the Electricity Act 1992; and in the case of a complaint relating to gas, the Gas Act 1992 and regulations and rules made under that Act; and breaches of industry codes; and (v) (vi) breaches of the dispute resolution scheme’s rules: a period after which the scheme, if asked by a com- plainant, must investigate a complaint that has been made directly to a member: that complaints about members must be investigated in 30 a way that is consistent with the rules of natural justice: that any information may be considered in relation to a complaint, and any inquiry may be made, that is fair and reasonable in the circumstances: the kinds of remedial action that the scheme may require 35 members to take in order to resolve complaints (for ex- ample, a requirement to compensate a complainant up 25 (b) (c) (d) (e) (f) (g) 149 Schedule
 4 Electricity Industry Bill (h) (i) (j) (k) (l) (m) to a certain amount stated in the rules, or to change a system): that the scheme will not charge a fee to any complainant to investigate or resolve a complaint: that a resolution of a complaint about a member of the 5 scheme is binding on the member concerned: that a resolution of a complaint about a member of the scheme is binding on the complainant concerned if the complainant accepts the resolution or has agreed to be bound by a final decision and a
 final decision is made: that the scheme may cease investigating and resolving a complaint if the complainant takes alternative court action against the member: that, if a complainant accepts a resolution or has agreed to be bound by a final decision and a final decision is 15 made, the complainant may not seek or obtain any other resolution of the complaint through any court or tri- bunal: how the responsible person will promote knowledge about, and accessibility to, the scheme to persons en- 20 titled to make a complaint.
10 The responsible person of the approved scheme must publicise the rules.

Compare: 2008 No 97 ss 63, 64 List of members The responsible person of for the approved scheme must main- tain and publicise a list of current members of the scheme.
Compare: 2008 No 97 s 62 25 Independent 5-yearly review The responsible person of for the approved scheme must en- 30 sure that, at least once every 5 years, an independent review of the scheme is carried out and the report of the review is pro- vided to the Minister within 3 months of its completion.
Compare: 2008 No 97 s 63(q) (2) 13 14 150 Electricity Industry Bill Schedule 4 15 (1) (2) (3) 16 (1) Annual report The responsible person of the approved scheme must prepare an annual report containing information, identified by the Min- ister by notice to the scheme, about the scheme in relation to that financial year.

The report must be supplied to the Minister within 3 months after the end of the financial year applying to the scheme.

The responsible person must publicise the annual report.
Compare: 2008 No 97 ss 68, 70 5 Provision of information The responsible person of the approved scheme must, on re- quest by the Minister, provide information on the following: (a) matters relating to the most recent annual report: (b) the scheme’s compliance with the principles listed in clause 5(2).

10 15 (2) Nothing in this clause or clause 15 authorises a breach of the Privacy Act 1993 or any obligation of confidentiality.
Compare: 2008 No 97 s 69 20 25 Regulated scheme: appointment and revocation of appointment 17 (1) (2) Appointment of regulated scheme The Governor-General may, by Order in Council made on the recommendation of the Minister,— (a) (b) The Minister may make a recommendation only if— (a) appoint a regulated scheme; and prescribe the rules of the regulated scheme.
the person responsible for the scheme consents in writing to the scheme being appointed as the regulated scheme; and the Minister is satisfied that the scheme is capable of 30 meeting the purpose of the dispute resolution scheme as set out in clause 1; and the Minister is satisfied that the scheme is a formally constituted dispute resolution body with demonstrable experience.
35 (b) (c) 151 Schedule 4 Electricity Industry Bill (3) (4) The Minister may make a recommendation appointing a re- serve regulated scheme only after consultation with the Min- ister of Energy and the Authority.
The Minister may make a recommendation prescribing the rules of the regulated scheme only after consulting with— (a) (b) (c) the Minister of Energy; and the Authority; and any persons (or their representatives) that the Minister considers are likely to be substantially affected by the recommendation.

(5) A failure to consult with the persons referred to in subclause (4)(c) does not affect the validity of an Order in Council pre- scribing the rules of the regulated scheme.
(6) An Order in Council made under this clause may impose con- ditions that relate to either or both of the following: (a) the governance arrangements relating to the regulated scheme: other matters referred to the principles listed in clause 5(2).

(b) Compare: 2008 No 97 s 72 5 10 15 20 Revocation of appointment as regulated scheme The Governor-General may, by Order in Council made on the recommendation of the Minister, revoke an appointment as the regulated scheme.
The Minister may make a recommendation only on 1 or more 25 of the following grounds: (a) there has been a failure to meet the purpose of the dis- pute resolution scheme: there has been a breach of a condition of appointment: the Minister has approved an approved scheme and the 30 approval takes effect not sooner than 3 months after the date of the recommendation: the responsible person requests that the scheme’s ap- pointment be revoked.
(b) (c) (d) The Minister may not make a recommendation unless he or she 35 has consulted with the Minister of Energy and the Authority.

Compare: 2008 No 97 s 73 18 (1) (2) (3) 152 Electricity Industry Bill Schedule 4 19 (1) (2) Notice of intention to revoke appointment If the Minister intends to recommend the revocation of the regulated scheme’s appointment, the Minister must notify the responsible person.
The Minister’s notice must— (a) state that the Minister intends to revoke the scheme’s appointment; and identify which of the grounds in clause 18(2)(a) to (c) apply; and identify the notice period, which must be at least 3 10 months, during which the responsible person may ob- ject to the intended revocation.
(b) (c) 5 Compare: 2008 No 97 s 74 (2) Objection to recommendation to revoke appointment 20 (1) During the notice period, the responsible person of the regu- 15 lated scheme may object (with reasons) to the proposed rec- ommendation to revoke the scheme’s appointment.
If the Minister receives an objection under subclause (1) within the notice period, the Minister must consider the objec- tion and must not proceed with a recommendation for revoca- 20 tion unless the Minister is satisfied that at least 1 of the grounds in clause 18(2)(a) to (c) applies.
Compare: 2008 No 97 s 75 153 Schedule 4A Electricity Industry Bill Schedule 4A Existing agreements in respect of Waitaki Power Scheme s 124D Agreement between Meridian Energy Limited and Transit New Zealand, dated April 2008, entitled “Agreement relation to water rights”.

in 5 Agreement between Meridian Energy Limited and Her Majesty The Queen acting by and through the Director-Gen- eral of Conservation, dated September 2006, entitled “Com- pensatory funding agreement”.
10 Agreement between Meridian Energy Limited and the Mackenzie District Council, dated January 2008, entitled “Agreement in relation to water rights”.

Agreement between Meridian Energy Limited and Royal For- est & Bird Protection Society of New Zealand Incorporated, 15 undated, entitled “Agreement in relation to water rights”.

Agreement between Meridian Energy Limited and Central South Island Fish and Game Council, dated 24 September 2008, entitled “Agreement in relation to water rights”.
Agreement between Meridian Energy Limited and New 20 Zealand Recreational Canoeing Association Incorporated and Tekapo Whitewater Trust, dated 30 September 2009, entitled “Agreement in relation to water rights”.

Agreement between Electricity Corporation of New Zealand Limited and Lower Waitaki Irrigation Company Limited, 25 Maerewhenua District Water Resource Co. Limited and Morven, Glenavy, Ikawai Irrigation Company Limited, dated 26 November 1990, entitled “Agreement in relation to water rights”.
154 8 9 10 11 Electricity Industry Bill Schedule 4A Agreement between Electricity Corporation of New Zealand Limited and Benmore Irrigation Company Limited, dated 26 November 1990, entitled “Agreement in relation to water rights”.

Agreement between Meridian Energy Limited and Te Rū- 5 nanga o Ngāi Tahu, dated 2 August 2000, entitled “Waitaki catchment deed of agreement”.
Agreement between Meridian Energy Limited and Mount Cook Salmon Limited, dated 24 May 1999, entitled “Agree- ment to lease”.
10 The head agreement between Electricity Corporation of New Zealand Limited and— (a) Her Majesty The Queen acting by and through the Min- ister of Conservation; and South Canterbury Fish and Game Council; and Ngāi Tahu Trust Board; and Benmore Irrigation Company Limited; and The New Zealand Canoeing Association Incorporated; and (b) (c) (d) (e) (f) Mackenzie District Council; and (g) Lower Waitaki Irrigation Company Limited; and (h) Maerewhenua District Water Resource Co. Limited; and 15 20 (i) Morven, Glenavy, Ikawai Irrigation Company Limited; (j) (k) (l) and Transit New Zealand; and South Canterbury Branch of Royal Forest & Bird Pro- tection Society of New Zealand Incorporated; and New Zealand Salmon Anglers Association Incorpor- ated, dated 26 November 1990, entitled “Agreement to 30 Electricity Corporation’s water rights”.
25 12 Agreement between Meridian Energy Limited and Mackenzie Irrigation Company Limited, dated 31 October 2006, entitled 155 Schedule 4A Electricity Industry Bill “Agreement in relation to the allocation of water for irriga- tion”.

156 Electricity Industry Bill Schedule 5 Schedule 5 Amendments to other enactments Part 1 Repeals of, and amendments to, Acts s 159 Crown Entities Act 2004 (2004 No 115) Schedule 1, Part 1, item Item relating to Electricity Commission in Part 1 of Schedule 1: repeal.
Schedule 1, Part 3: insert item relating to Electricity Authority in appropriate alphabetical order.

First column of Part 3 of Schedule 1: insert “Electricity Authority” 10 in its appropriate alphabetical order.

5 Electricity Amendment Act 2004 (2004 No 80) Repeal.

Electricity Amendment Act 2006 (2006) No 70) Section 5, new section 1A(b): repeal.
15 Energy Companies Act 1992 (1992 No 56) Section 46A: add: “(4) This section is subject to section 106 of the Electricity In- dustry Act 2009.” Gas Act 1992 (1992 No 124) Heading above section 43E: repeal and substitute the following head- ing: 20 “Dispute resolution”.

Section 43E: repeal and substitute: “43E Access to dispute resolution scheme “(1) Any person described in subsection (2) may make a com- plaint to the dispute resolution scheme concerning a gas dis- tributor or a gas retailer.
“(2) The persons who may make a complaint are any persons 25 (including consumers, potential consumers, and owners and 30 occupiers of land) except members of the dispute resolution scheme.
157 Schedule 5 Electricity Industry Bill Gas Act 1992 (1992 No 124)—continued Part 1—continued “(3) The dispute resolution scheme is either— “(a) “(b) the approved scheme identified in clause 3 of Sched- ule 4 of the Electricity Industry Act 2009; or the regulated scheme appointed under clause 17 of Schedule 4 of that Act.

5 “(4) The procedures for making complaints to the dispute reso- lution scheme are as set out in the rules of the dispute reso- lution scheme.
“Compare: 1992 No 122 s 158G “43EA Membership of dispute resolution scheme “(1) Every gas distributor and every gas retailer must be a member of the dispute resolution scheme, unless exempt under sub- section (3).

10 “(2) A person commits an offence and is liable on summary convic- tion to a fine not exceeding $100,000 if the person knowingly 15 refuses or fails to become a member of the dispute resolution scheme.
“(3) A person need not be a member of a dispute resolution scheme if— “(a) “(b) the person is a member of a class of industry participants 20 identified in regulations made under section 43S(1) as a class that need not be a member; or the Minister of Consumer Affairs issues a exempts the person by issuing an individual exemption notice in the Gazette that— “(i) states that identifies the person that is exempt from the obligation to be a member; and includes a statement of thegives reasons for the exemption.
“(ii) 25 “(3A) The Minister of Consumer Affairs may grant an individual 30 exemption to a person only if he or she is satisfied that mem- bership of the dispute resolution scheme by the person is not necessary in order to meet the purpose of the dispute resolution scheme because complaints are unlikely to be made against 158 Electricity Industry Bill Schedule 5 Gas Act 1992 (1992 No 124)—continued Part 1—continued the person or because complaints should be made in another forum.
“(3B) The Minister of Consumer Affairs may amend or revoke an individual exemption, by issuing a notice in the Gazette that identifies the exempt participant and gives reasons for the 5 amendment or revocation, but only if the Minister— “(a) has given notice of the proposed amendment or revo- cation to the exempt person (where possible) and given the person a reasonable opportunity to comment on the proposal; and is satisfied that the amendment or revocation is neces- sary or desirable in order to meet the purpose of the dis- pute resolution scheme.
“(b) “(4) To avoid doubt, a notice issued under subsection (3)(b)— is not a regulation for any purpose; and “(a) “(b) may be amended or revoked at any time.

“(4) To avoid doubt, an individual exemption notice issued under subsection (3)(b) is not a regulation for any purpose.

“(5) The Ministry must include on its Internet site a list of all cur- rent class and individual exemptions.
10 15 20 “43EB Compliance with rules and binding settlements “(1) Members of the dispute resolution scheme must comply with the rules of the scheme.

“(2) On the application of the person responsible for the dispute resolution scheme, the District Court may require a member 25 of the scheme to do either or both of the following: comply with the rules of the scheme: “(a) comply with a binding settlement determined by the “(b) scheme in response to a complaint.
If a District Court is satisfied that the terms of a binding settle- 30 ment are manifestly unreasonable, the court’s order under sub- section (2)(b) may modify the terms of the binding settle- ment, provided that the modification results in a binding settle- “(3) 159 Schedule 5 Electricity Industry Bill Gas Act 1992 (1992 No 124)—continued Part 1—continued “(4) ment that could have been made under the dispute resolution scheme.
If an order requiring a member to comply with a binding settle- ment includes a requirement that the member pay an amount of money to a person, that order (or part of the order) may be 5 enforced as if it were a judgment by a District Court for the payment of a sum of money.
“43EC Offence to fail to comply with District Court order “(1) A member of the dispute resolution scheme who, knowing that the member is subject to an order made under section 43EB, 10 fails to comply with the order, or fails to comply with the order within the time or in the manner required by the order, commits an offence and is liable on summary conviction to a fine not exceeding $100,000.
“(2) Nothing in this section applies to an order or part of an order 15 of a District Court referred to in section 43EB(4).” Section 43S(1): insert the following paragraph after paragraph (f): “(fa) exempt or provide for exemptions (including provide for the revocation of exemptions), on any terms and conditions, of any class of persons from all or any of 20 the requirements in sections 43EA to 43EC (which relate to dispute resolution):”.
Section 43ZZH(2): omit “Electricity Commission that is continued under subpart 1 of Part 15 of the Electricity Act 1992” and substitute “Electricity Authority established by section 14 of the Electricity 25 Industry Act 2009”.

Section 43ZZI(1): Omit “Electricity Commission continues under both the Electricity Act 1992” and substitute “Electricity Authority continues under both the Electricity Industry Act 2009”.

Section 43ZZI(2): omit “Electricity Commission” and substitute 30 “Electricity Authority”.
Section 43ZZJ(2): omit “objective specified in section 172N of the Electricity Act 1992 in relation to electricity” and substitute “object- 160 Electricity Industry Bill Schedule 5 Gas Act 1992 (1992 No 124)—continued Part 1—continued ive specified in section 17 of the Electricity Industry Act 2009 in relation to electricity”.

Section 43ZZK(2): repeal.


Section 43ZZL(3): omit “functions specified in section 172O of the Electricity Act 1992” and substitute “functions specified in section 5 18 of the Electricity Industry Act 2009”.
Section 43ZZM: repeal and substitute: “43ZZM Additional members and their duties “(1) The Minister may recommend, and the Governor-General may appoint, up to 2 additional persons as members of the Energy 10 Commission, having regard to the need to ensure that the Com- mission has among its members knowledge and experience of, and capability in, the gas industry.

In that case, section 15(1) of the Electricity Industry Act 2009 must be read as if the Commission comprises between 15 5 and 9 members.
“(2) “(3) A member appointed under this section, 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 20 group of gas industry participants.” Section 43ZZN: omit “must give effect to its principal objective and specific outcomes and its GPS objectives and outcomes” and substi- tute “must give effect to its principal objective and specific outcomes and have regard to its GPS objectives and outcomes”.
Section 43ZZO: omit “Sections 172Z and 172ZJ to 172ZQ of the Electricity Act 1992 apply equally in relation to the Energy Com- mission and in respect of gas” and substitute: “Section 172Z of the Electricity Act 1992 applies (as if it had not been repealed) in relation to the Energy Commission in respect of gas”.

Section 43ZZP(1): omit “Section 172ZC of the Electricity Act 1992” and substitute “Section 126 of the Electricity Industry Act 2009”.
Section 43ZZQ(1): omit “Electricity Commission” and substitute “Electricity Authority”.

25 30 35 161 Schedule 5 Electricity Industry Bill Gas Act 1992 (1992 No 124)—continued Part 1—continued Section 43ZZQ(2): omit “Electricity Commission” and substitute “Electricity Authority”.
Local Government Act 2002 (2002 No 84) Section 6(4)(a) of the Local Government Act 2002 (which defines what are not council-controlled organisations) is repealed and the fol- 5 lowing paragraph substituted: “(a) a body corporate that carries on an electricity business (whether or not that business is its principal or only business) or a trust that is constituted for purposes which include owning or controlling, directly or indi- 10 rectly, all or part of an electricity company that carries on that business; or”.
Ombudsmen Act 1975 (1975 No 9) Schedule 1, Part 2: omit item relating to the Electricity Commission and substitute: “Electricity Authority”.

Part 2 Revocations of, and amendments to, other enactments Electricity Governance Regulations 2003 (SR 2003/374) Revoke.

Electricity Governance (Connection of Distributed Generation) Regulations 2007 (SR 2007/219) Revoke.

Electricity Governance (Security of Supply) Regulations 2008 (SR 2008/252) Revoke.
15 20 25 162 Electricity Industry Bill Part 2—continued Electricity Industry Reform Act (Fees) Regulations 1998 (SR 1998/276) Revoke.

Electricity Governance Rules 2003 Revoke.

5 Legislative history 10 December 2009 15 December 2009 Introduction (Bill 111–1) First reading and referral to Finance and Expenditure Committee 12 Published under the authority of the House of Representatives—2010 Wellington, New Zealand: 163