Collins JudithENERGY INNOVATION (ELECTRIC VEHICLES AND OTHER MATTERS) AMENDMENT BILLSecond ReadingHon JUDITH COLLINS (Minister of Energy and Resources): I move That the Energy Innovation (Electric Vehicles and Other Matters) Amendment Bill be now read a second time. I want to acknowledge the work of the Commerce Committee and thank its members for their thorough and robust consideration of this bill. In particular I note the chair of the select committee Melissa Lee and her contribution.To improve the efficiency of our energy use and to meet our climate change commitments we need a shift in focus to reduce our emissions and improve our energy productivity. Transport energy and process heat are key areas where gains can be made. The bill has four parts and will amend the Electricity Industry Act 2010 the Energy (Fuels Levies and References) Act 1989 the Land Transport Act 1998 and the Road User Charges Act 2012. It will support our focus on reducing emissions and improving energy productivity while ensuring our legislation can accommodate innovation.The bill will expand the purposes for which the existing electricity efficiency levy the gas levy and the petroleum or engine fuel monitoring levy can be used. It will enable the Energy Efficiency and Conservation Authority (EECA) to use all three levies to encourage promote and support energy efficiency energy conservation and the use of renewable sources of energy. Giving EECA access funding from three levies will enable the cost of EECA's activities to be spread across the levies for transport fuels and gas instead of being confined to electricity. This move beyond electricity will enable EECA to use its levy funding to undertake a broader range of activities giving it flexibility to focus on areas where the measurable gain is the greatest. The bill also promises to improve the operation and administration of the levies.Electric vehicles (EVs) offer a way to leverage greater value from New Zealand's renewable electricity and therefore offer the most potential for emissions reduction while ensuring economic growth. This was the rationale behind the Electric Vehicles Programme—a package of proposals announced by the Government last year to increase the uptake of EVs. This bill contains two initiatives from the EVs programme. The bill will clarify that a road-controlling authority may use its bylaw-making powers to give EVs access to special vehicle lanes. Trials in places like Norway and California have shown that allowing EVs in special vehicle lanes is one of the most effective non-financial incentives we can put in place to increase uptake.The bill also encourages the uptake of electric vehicles by extending the road-user charge exemption to include heavy electric vehicles such as electric trucks and buses. This change is a transparent and efficient way to provide a financial incentive to encourage heavy electric vehicles over equivalent conventional heavy vehicles.The bill also clarifies how electricity industry legislation applies to secondary networks. Secondary networks are smaller electricity networks that indirectly connect to the national grid typically through a local distribution network. They offer a unique business model that is becoming more widespread and is attractive to business owners. Owning and operating a secondary network offers business owners opportunities for integrating new energy technologies such as combining solar photo photovoltaics—sorry I always have trouble with that one; in other words solar panels—and battery storage on a residential subdivision and supplying those to consumers.Consistent treatment under the legislation will help this kind of innovative business model to endure and thrive. The bill will provide regulatory certainty and improve outcomes for consumers in the market as a whole. It will ensure that consumers on secondary networks have the same consumer protection and access to dispute resolution as consumers on local electricity networks.The Commerce Committee has made some sensible recommendations that will improve this bill. I will touch on some of these now. There have been some concerns raised regarding a road-controlling authority's ability to effectively enforce the use of special vehicle lanes by EVs. The committee has recommended a change to the bill to permit an image taken by approved vehicle surveillance equipment—or in other words an automated camera—to be evidence of the unauthorised use of a special vehicle lane.Once a number plate of a vehicle has been recorded information about it can be accessed on the motor vehicle register. The motor vehicle register is in the process of being updated to show whether or not a vehicle is electric. It also shows who owns the vehicle so that if necessary the owner can be sent an infringement notice. This change will provide another option to enabling road-controlling authorities to enforce the correct use of special vehicle lanes.The bill as introduced will also allow heavy EVs to be exempted from road-user charges (RUC) for a period of time by Order in Council. The committee has recommended a change that requires the relevant Minister to be satisfied that any Order in Council under this section has the purpose of encouraging and supporting the uptake of heavy EVs. The committee has further recommended that the initial RUC exemption would expire no later than 31 December 2025 and that any subsequent exemption would last for no more than 5 years.With regard to the changes the bill makes to expanding existing energy levies to recover funding for EECA the committee has also made some sensible recommendations to improve operation and administration of the gas levy provided under the Energies (Fuels Levies and References) Act 1989. These changes include placing liability for the gas levy on retailers alone to improve recovery of the levy. It has also recommended shifting the existing exemptions to the levy to regulation to enable them to be kept up to date and removing the current exemption for a sale of less than 10000 gigajoules of gas in a quarter so that every retailer is treated the same.Finally the bill as introduced makes changes to clarify how electricity industry regulation applies to secondary networks. It does this by adding new definitions for secondary network" and "secondary network provider" and a statement that a secondary network provider is to be treated as if they were a distributer for the purposes of the Electricity Industry Act.During consideration of the bill submitters raised concerns that the new definitions were too broad and could inadvertently include things they should not. The committee has recommended a minor change to the drafting to more closely match the policy intent which is that the owners of secondary networks who are undertaking activities that are akin to those of an electricity distributer are subject to the same requirements under the legislation. The committee noted that there were a range of exemption options already in place and that obligations or requirements can be developed or amended to ensure that they are appropriate for secondary network owners.This bill will encourage energy innovation such as emerging energy technologies and increase variation in energy-related business models so that New Zealand can respond to its environmental and energy objectives. I commend this bill to the House."