Commerce Amendment Act (No 2) 2001

1: Title
1: This Act is the Commerce Amendment Act (No 2) 2001.
2: In this Act, the Commerce Act 1986 the principal Act
2: Commencement
This Act comes into force on the day after the date on which it receives the Royal assent.
3: New
Part 4A The principal Act is amended by inserting, after Part 4
4A: Provisions applicable to electricity industry
57D: Interpretation
1: In this Part, unless the context otherwise requires,— consumer section 2(1) of the Electricity Act 1992 electricity business section 3 of the Electricity Industry Reform Act 1998 electricity lines business section 4 of the Electricity Industry Reform Act 1998 information disclosed information subpart 3 involved section 7 of the Electricity Industry Reform Act 1998 large electricity distributor large electricity lines large line owner line owner electricity distributor section 2(1) of the Electricity Act 1992 national grid prescribed voltage electric line small lines business
a: the total circuit length of the prescribed voltage electric lines owned by the person (or over which electricity is conveyed by the person, as the case may be) is less than 25 kilometres; or
b: the electricity conveyed by the person (or the electricity conveyed over lines owned by the person, as the case may be) is less than 20 gigawatt hours per annum; or
c: the electricity conveyed by the person (or the electricity conveyed over lines owned by the person, as the case may be) is conveyed to less than 500 consumers; or
d: the lines owned by the person (or over which electricity is conveyed by the person, as the case may be) are not connected, directly or indirectly, to the national grid Transpower
2: The prescribed voltage electric lines, the electricity conveyed, or the number of consumers to whom electricity is conveyed, when measured in relation to a person ( person A subsection (1) person B
1: Controlled Goods Or Services
57E: Purpose
The purpose of this subpart is to promote the efficient operation of markets directly related to electricity distribution and transmission services through targeted control for the long-term benefit of consumers by ensuring that suppliers—
a: are limited in their ability to extract excessive profits; and
b: face strong incentives to improve efficiency and provide services at a quality that reflects consumer demands; and
c: share the benefits of efficiency gains with consumers, including through lower prices.
57F: Commission, not Minister, may declare that goods or services supplied by large electricity lines businesses are controlled
1: The Commission may, by notice in the Gazette
2: No Order in Council may be made under Part IV in
3: A declaration must be made by notice in the Gazette
4: The Commission must publish the declaration on the Internet and in any other manner (if any) that the Commission considers appropriate.
57G: Thresholds for declaration of control
1: The Commission must, as soon as practicable after the commencement of this subpart, and may from time to time—
a: consult with participants in the electricity distribution and transmission markets and with consumers as to possible thresholds for the declaration of control in relation to large electricity lines businesses; and
b: set thresholds for the declaration of control in relation to large electricity lines businesses; and
c: publish those thresholds in the Gazette
2: Thresholds can be expressed in quantitative or qualitative terms.
57H: Process for making decisions on declaration of control
The Commission must—
a: assess large electricity lines businesses against the thresholds set under this subpart; and
b: identify any large electricity lines business that breaches the thresholds; and
c: determine whether or not to declare all or any of the goods or services supplied by all or any of the identified large electricity lines businesses to be controlled, taking into account the purpose of this subpart; and
d: in respect of each identified large electricity lines business,—
i: make a control declaration; or
ii: publish the reasons for not making a control declaration in the Gazette
57I: Process before declaration made
1: Before making any declaration of control under section 57F
a: publish its intention to make a declaration and invite interested persons to give their views on the matter; and
b: give a reasonable opportunity to interested persons to give those views; and
c: have regard to those views.
2: The notice of intention to declare must—
a: be published in the Gazette
b: specify that the matter relates to the making of a declaration; and
c: invite interested persons to give their views on that matter to the Commission and specify the time and manner within which they may do so.
57J: Effect of declaration of control
1: A declaration of control under this subpart has the same effect as if it were an Order in Council made under section 53 sections 55 and 57B and Parts V, VI, and VII
2: Subsection (1) section 62 of the Electricity Act 1992 section 62(3) of that Act
57K: Priorities
1: The Commission may prioritise its duties under this subpart by (without limitation)—
a: assessing 1 or any (but not necessarily all) of the large electricity lines businesses; or
b: exercising its powers to make a declaration of control in relation to 1 or any (but not necessarily all) of the large electricity lines businesses that are identified as having breached any thresholds set under this subpart; or
c: making provisional authorisations or accepting undertakings (rather than making final authorisations) in respect of 1 or more large electricity lines businesses to which a declaration of control relates.
2: In so prioritising, the Commission must have regard to the purpose of this subpart and may also have regard to any other factors it considers relevant, including (without limitation) all, any, or none of the following:
a: the size of the business:
b: the recent performance of the business, including prices charged and the extent of any excess profits:
c: the quality of the information provided to the Commission:
d: the extent to which businesses have breached the thresholds set by the Commission.
57L: Maximum of 5 years for duration of declaration
1: Any declaration of control under this subpart expires on the earlier of—
a: the expiry date stated in the declaration; or
b: the expiry of 5 years from the date of the declaration.
2: The Commission may make a further declaration of control in relation to the electricity lines business only after considering the purpose of this subpart.
57M: Authorisations and undertakings
In exercising its powers under sections 70 to 72 section 70A, and sections 70 to 72
57N: Commission may lift control
1: The Commission may, by notice in the Gazette
2: The Commission may make a further declaration of control in relation to the electricity lines business only after considering the purpose of this subpart.
2: Transpower's Pricing Methodology
57O: Commission may be required to authorise Transpower's pricing methodology
1: The Governor-General may, by Order in Council made on the recommendation of the Minister of Energy, require the Commerce Commission to make an authorisation in respect of all or any component of Transpower's pricing methodology.
2: The Governor-General may make an Order in Council under subsection (1) section 57F
3: The Minister of Energy must consult with Transpower and other affected parties before making a recommendation.
57P: Authorisations in respect of Transpower's pricing methodology
1: If an Order in Council is made under section 57O
2: The Commission may also, as part of the authorisation, do any of the following:
a: define the charges for individual electricity generators, electricity retailers, electricity lines businesses, customers, consumers, or classes of any of those persons:
b: impose quality standards generally or in respect of the supply of electricity line business activities to individual electricity generators, electricity retailers, electricity lines businesses, customers, or consumers, or classes of any of those persons:
c: require a specified person or class of persons receiving (either directly or indirectly) goods or services from Transpower to pay a specified amount or proportion of the total price, or the total price, for those goods or services:
d: authorise a way or ways in which Transpower may apply the methodology.
3: This section does not limit the generality of any authorisation that may be made in respect of Transpower under this Act if goods and services have also been declared to be controlled.
57Q: Authorisations and undertakings
In exercising its powers under sections 70 and 72 section 70A
57R: Enforcement of authorisations
1: If an authorisation is in force under this subpart, Transpower must not supply any goods or services to which the authorisation applies except in accordance with the authorisation (or with an undertaking given under section 72
2: Subsection (1) section 62 of the Electricity Act 1992 section 62(3) of that Act
3: This Act, including (without limitation) sections 86 and 87 subsection (1) section 55
4: The authorisation has the same effect as if it were made under section 70 section 57B and Parts V, VI, and VII
5: An amount charged by Transpower in accordance with a methodology specified by the Commerce Commission authorisation (or by an undertaking given under section 72
a: is recoverable in any court of competent jurisdiction as a debt due to Transpower; and
b: may be challenged in any proceedings to recover the debt on the ground that Transpower has incorrectly applied the methodology in a manner that is adverse to the payer and that was not authorised by the Commission, but the methodology itself may not be challenged.
57S: Revocation of authorisations
1: The Governor-General may, by Order in Council, revoke an authorisation made under this subpart.
2: Section 65
3: Information Disclosure
57T: Information disclosure
1: The purpose of this subpart is to promote the efficient operation of markets directly related to electricity distribution and transmission services by ensuring that large line owners and large electricity distributors make publicly available reliable and timely information about the operation and behaviour of those businesses, so that a wide range of people are informed about such factors as profits, costs, asset values, price (including terms and conditions of supply), quality, security, and reliability of supply of those businesses.
2: The Commerce Commission—
a: must require large line owners and large electricity distributors to disclose information concerning their business as a line owner or as an electricity distributor:
b: may require, for any disclosed information, the adoption, in the preparation or compilation of that information, of any methodology that is required by the Commerce Commission:
c: may require any person ( person A person B
3: Information required under subsection (2)
a: financial statements:
b: asset values and valuation reports:
c: prices and pricing methodologies:
d: contracts:
e: transactions with related parties:
f: financial and non-financial performance measures:
g: plans and forecasts:
h: policies and methodologies in these or other areas.
4: The Commission must publish requirements made under this section—
a: by publishing a notice in the Gazette
b: by making copies of the requirements available for inspection, free of charge,—
i: at the Commission (during ordinary office hours); and
ii: on the Internet in an electronic form that is publicly accessible (at all reasonable times); and
c: by making copies of them available for purchase at a reasonable price.
5: The notice in the Gazette
6: In this section, unless the context otherwise requires,— disclose prescribed
7: The Commission may not require the disclosure of the names of the parties to, or the terms and conditions of, contracts made before 1 August 1990 but, if the contract is modified after that date, the Commission may require the disclosure of information as to the modification, the term or condition that has been modified (including its context), and the names (or characteristics) of the parties.
8: Requirements under this section may—
a: prescribe the form and manner in which information is to be disclosed:
b: require disclosed information, or information from which disclosed information is derived (in whole or in part), to be certified, in the prescribed form and manner, by persons belonging to any specified class of persons:
c: set rules about when and for how long information must be disclosed:
d: exempt or provide for exemptions (including provide for the revocation of exemptions), on any terms and conditions, of any person or class of persons from all or any of the requirements:
e: provide for transitional provisions:
f: be made in respect of all or any large line owners and large electricity distributors and in respect of all or part of their business.
57U: Information to be supplied to Commerce Commission
1: Every person who is required under section 57T
a: a copy of all information disclosed under that section, which must be supplied within 5 working days after the information is first made so available:
b: any further statements, reports, agreements, particulars, and other information requested in writing by the Commerce Commission for the purpose of monitoring the person's compliance with the requirements issued under that section.
2: Every person to whom a request is made under subsection (1)(b)
3: The Commission may require all or any statements, reports, agreements, particulars, and information supplied under subsection (1)
57V: Commerce Commission to publish summaries
The Commerce Commission must, as soon as practicable after information is publicly disclosed under this subpart, publish a summary and analysis of the publicly disclosed information for the purpose of promoting greater understanding of the relative performance of individual line owners and electricity distributors, and the changes in performance over time.
57W: Reasonable charge may be imposed for providing copies of statements
1: Any person who is required under section 57T
2: A charge must be no more than is reasonably required to recover the costs of providing those copies.
4: Asset Valuations
Recalibration of asset values of large electricity line owners
57X: Purpose of recalibrations
The purpose of sections 57Z to 57ZC
57Y: Interpretation
In this subpart,— current ODV Handbook information disclosure regulations section 170 of the Electricity Act 1992 system fixed assets
57Z: Large electricity line owners must supply valuation to Commerce Commission
1: Every large electricity line owner must supply a copy of a valuation report relating to its line business system fixed assets to the Commerce Commission no later than 31 August 2001 (or, in the case of Transpower, no later than 30 November 2001).
2: The report must be the most recent report, with a valuation date on or before 31 March 2001 (or, in the case of Transpower, on or before 30 June 2001), carried out for the purpose of regulation 20 of the information disclosure regulations
3: A copy of the certificate in form 7 of those regulations
57ZA: Comprehensive audit of asset values of large electricity line owners
1: The Commerce Commission must, as soon as practicable after receiving a valuation report from a large line owner, carry out a comprehensive audit of the valuation of the line business system fixed assets of the line owner, using the ODV method as set out in the current ODV Handbook.
2: The Commission must publish a document outlining the processes that will be involved in a comprehensive audit, the form that the audit will take, and the circumstances under which the valuation report will be approved.
3: The Commission must have regard to the purpose of this subpart when preparing that document.
57ZB: Procedure after audit of asset values carried out
1: The Commission must, as soon as practicable after completing an audit, notify the line owner whether or not it will approve the valuation report.
2: If the Commission does not approve the valuation report, the notification in subsection (1)
a: give the reasons why the report was not approved; and
b: specify the date by which a revised valuation report must be given to the Commission.
3: The Commission must, as soon as practicable after receiving a revised valuation report, consider the valuation report and notify the line owner of its decision as in subsections (1) and (2)
4: If the line owner does not comply with a requirement to give a revised valuation report that meets the Commission's requirements to the Commission by the specified date, the Commission may revise the valuation report itself.
5: The Commission must have regard to any submissions made to it by the line owner or any user of the line business system fixed assets or any other person when carrying out the audit.
57ZC: Outcome of audit of asset values
1: Every large line owner must publicly disclose, by 31 March 2002, a valuation report that has been approved by the Commission.
2: The line owner must also, within 5 working days of publicly disclosing that valuation report, publish on the Internet a notice stating—
a: that the valuation has been publicly disclosed; and
b: the valuation date of the valuation report; and
c: the valuation of the line business system fixed assets as stated in the report; and
d: whether the valuation of the line business fixed assets has changed as a result of the comprehensive audit process under this Act and, if so, by how much.
3: The information disclosure regulations or, as the case may be, information disclosure requirements issued by the Commission under section 57T
4: The Commission may require a line owner to modify previous disclosures made under the information disclosure regulations so that they are consistent with the new valuation report.
5: The Commission may specify the terms and conditions on which those modifications must be made. Review of valuation methodologies
57ZD: Review of valuation methodologies
The Commission must carry out a review of valuation methodologies for line business system fixed assets as soon as practicable.
57ZE: Process when carrying out review of valuation methodologies
1: When carrying out its review of valuation methodologies under section 57ZD
a: publish its intention to carry out a review of valuation methodologies and invite interested persons to give their views on the matter; and
b: give a reasonable opportunity to interested persons to give those views; and
c: have regard to those views.
2: The notice of intention to carry out a review must—
a: be published in the Gazette
b: specify that the matter relates to the carrying out of a review of valuation methodologies; and
c: invite interested persons to give their views on that matter to the Commission and specify the time and manner in which they may do so.
5: General provisions
57ZF: Powers of Commission
The Commission has, for the purpose of carrying out its functions under this Part, any powers under this Act that it considers are necessary or desirable for that purpose.
57ZG: Powers of entry and inspection
1: The purpose of this section is to provide for access to line business system fixed assets, and to information about those assets, for the purpose of carrying out activities under subpart 4
2: The Commission may authorise any person or persons to exercise all or any of the powers contained in this section in respect of a specified line owner.
3: An authorised person may, at any reasonable time, enter any premises—
a: owned or occupied by the line owner; or
b: on or at which line business system fixed assets, or information relating to those assets, are situated.
4: An authorised person must give reasonable notice to the owner or occupier of the premises (at least 5 working days before entry) of his or her intention to enter the premises.
5: An authorised person may do anything that is reasonably incidental to activities under subpart 4 Electricity Act 1992 Health and Safety in Employment Act 1992
a: carrying out inspections:
b: conducting examinations, tests, and inquiries, or directing personnel of the line owner to conduct examinations, tests, or inquiries:
c: taking photographs and measurements and making sketches and recordings:
d: requiring the line owner, or its personnel, to produce documents or information relating to the line business system fixed assets and permitting the authorised person to examine and make copies or extracts of the documents and information:
e: requiring the line owner, or its personnel, to make or provide statements, in any form and manner the authorised person specifies, about the condition, or other matters relating to the line business system fixed assets.
6: However, this section does not authorise an authorised person to enter a home, except with the consent of an occupier or under a warrant issued under section 98A
57ZH: Authorised persons to prove identity
1: Every authorised person who enters any place under section 57ZG
a: to the extent practicable, give the line owner not less than 5 working days' notice of the proposed entry; and
b: on first entering and, if requested, at any later time, produce to the person apparently in charge of the place the authorisation under section 57ZG
2: If an authorised person enters any place under the authority of this Act and is unable, despite reasonable efforts, to find any person apparently in charge, the authorised person must before leaving the place leave a written notice stating—
a: the person's identity; and
b: the address of a place where the authorised person may be contacted; and
c: the date and time of entry; and
d: the reasons for entering.
57ZI: Offence to obstruct authorised persons
1: Every large line owner or large electricity distributor commits an offence, and is liable on summary conviction to a fine not exceeding $200,000 who intentionally obstructs, delays, hinders, or deceives, or causes to be obstructed, delayed, hindered, or deceived, an authorised person while the person is lawfully doing anything under section 57ZG
2: If the Commission has reason to believe that any large line owner or large electricity distributor is committing an offence under this section, the Commission has, for the purpose of carrying out its activities under subpart 4 section 98A, and sections 98A to 98G
57ZJ: Other offences
1: Every person commits an offence who—
a: refuses or knowingly fails to comply with any information disclosure requirements made under section 57T
b: knowingly makes a false declaration when supplying any statement, report, agreement, particulars, or information under section 57U
c: knowingly makes a false declaration when supplying any statement, report, agreement, particulars, or information for the purpose of an asset valuation under section 57Z
d: fails to publicly disclose a valuation report under section 57ZC(1)
2: Every person who commits an offence against subsection (1)(a) or subsection (1)(d)
3: Every person who commits an offence against subsection (1)(b) or subsection (1)(c) 1992 No 122 s 172
57ZK: Levy of electricity lines businesses
1: Every large electricity lines business (or prescribed class of large electricity lines businesses) must pay to the Minister of Energy the levy prescribed by regulations made under subsection (2)
2: The Governor-General may, by Order in Council made on the recommendation of the Minister of Energy, make regulations—
a: specifying the amount of levies, or method of calculating or ascertaining the amount of levies, on the basis that the estimated costs of performing the Commission's functions, powers, and duties under this Part, and of collecting the levy money, should be met fully out of levies:
b: including in levies, or providing for inclusion in levies of, any shortfall in recovering those actual costs:
c: refunding, or providing for refunds of, any over-recovery of those actual costs:
d: providing different levies for different classes of large electricity lines businesses:
e: specifying the financial year or part financial year to which those levies apply, and applying to that financial year or part and each subsequent financial year until revoked or replaced:
f: providing for the payment and collection of those levies:
g: for the first financial year to which the levy applies, including in the levy amount or method costs incurred from 13 December 2000 by the Commission in connection with preparing itself to perform, and performing, its functions, powers, and duties under this Part, irrespective of the fact that the regulations are made and come into effect after that date:
h: requiring payment of a levy for a financial year or part financial year, irrespective of the fact that the regulations may be made after that financial year has commenced:
i: exempting or providing for exemptions from, and providing for waivers of, the whole or any part of the levy for any case or class of cases.
3: The amount of any unpaid levy is recoverable in any court of competent jurisdiction as a debt due to the Crown.
4: Appeals in relation to determinations by Commission
1: Section 91 subsection (1)
1: Subject to sections 92 to 95 subsection (2)
a: there is a right of appeal to the High Court against any determination of the Commission under this Act other than—
i: a declaration under section 57F
ii: an authorisation under section 70 section 71
iii: an authorisation under section 57P
iv: a decision of the Commission whether or not to approve a valuation report under section 57ZB
b: there is a right of appeal to the High Court by way of case stated for the opinion of the Court on a question of law only against—
i: an authorisation under section 70 section 71
ii: an authorisation under section 57P
2: Section 93 appeal (other than an appeal under section 91(1)(b)