1. Introduction

1.1 Background

Electricity is transported long distances from where it is generated to where it is used. The national grid traverses 72 local and 12 regional councils and is operated by Transpower New Zealand Ltd (Transpower), a state-owned enterprise. If New Zealand continues on its current path, electricity demand is projected to grow at around 1.3 per cent per annum (Ministry of Economic Development, 2007). Transpower’s expenditure on transmission maintenance and upgrading activities is predicted to increase over the next 10 years (Transpower New Zealand Ltd, 2008).

In many situations there is no substitute for electricity. A resilient high-voltage electricity transmission network (the national grid) is critical for security of supply and supports the development of renewable electricity generation. However, having a resilient grid that is responsive to our increasing demand for electricity depends on adequate maintenance, upgrading the capacity of existing lines, and building new lines in areas where capacity has been reached.²

The projected growth in electricity demand gives Transpower strong incentives to increase the capacity of existing network. This, however, might prove difficult where plan rules for transmission activities vary between districts. Therefore, Transpower places strong emphasis on working with councils to ensure the operation, maintenance and minor upgrading of transmission lines is conducted in an effective and efficient way.

1.1.1 Providing for infrastructure under the Resource Management Act

The 2004 review of the Resource Management Act 1991 (the RMA) resulted in amendments that enhanced the Act’s ability to provide national guidance through the use of existing RMA instruments such as national policy statements and national environmental standards. The review envisaged that more guidance would be provided on issues of national significance, in particular network infrastructure.

Improving planning for infrastructure is a key area of focus for the Government. The RMA 2009 amendments will provide for greater central government direction to improve management of infrastructure. Electricity grid upgrades and new renewable generation infrastructure are part of the Government’s programme of infrastructure investment for economic recovery. The Resource Management (Simplifying and Streamlining) Amendment Bill 2009 (the Bill) provides for a number of changes to the RMA that will have an impact on all NES. Specifically, the Bill proposes:

• removing the non-complying activity category of activities after a three-year transitional period
• simplifying the process for incorporating regulations into plans by allowing councils to refer to an NES and remove redundant plan provisions without going through the full public consultation process
• changes to the designation process.³

Proposed changes were not taken into account for this report because it is not yet clear what the final shape of the Bill will be.

1.1.2 Development of national guidance on electricity transmission

In January 2005 the Reference Group on Electricity Transmission was established to evaluate and advise on the merits and potential scope of national guidance on the management of electricity transmission under the RMA. The Reference Group was chaired by the Ministry of Economic Development and had representatives from relevant government departments, Business New Zealand, Local Government New Zealand, Transpower, Federated Farmers and the Electricity Commission.

In December 2005 the Reference Group produced for consultation a draft report that evaluated a range of options for national guidance. Twenty-nine submissions were received. The report of the Reference Group was finalised in April 2006 after considering the views of submitters (Reference Group on Electricity Transmission, 2006). The Reference Group’s recommendations were considered by Cabinet in July 2006, and the Minister for the Environment was invited to develop national environmental standards and a national policy statement for electricity transmission.

The Ministry for the Environment developed three separate policy projects arising from the recommendations of the Reference Group.

• The first resulted in the production of the National Policy Statement on Electricity Transmission, which is discussed in section 2.3.2.
• The second focused on district and regional plans’ provisions for, and management of, the effects of the operation, maintenance and upgrading of the electricity transmission network (referred to as “transmission activities”).
• The third concentrated on how to protect the electricity transmission network from the activities of third parties that could damage the network or put it at risk. This work is ongoing, and a further review of the options is yet to be undertaken.

1.1.3 The national environmental standards

The Ministry for the Environment released a discussion document for public consultation in October 2007 (Ministry for the Environment, 2007). The document contained proposals for NES that would:

• provide for the efficient use, maintenance and upgrading of the existing transmission network by specifying activities that do not have significant effects and can be undertaken without the need for resource consents, and that would specify resource consent categories for other activities
• protect electricity transmission lines from inappropriate third-party activities.

Public consultation on the proposed NES attracted 84 submissions from local and central government, industry, land owners, non-governmental organisations and individuals. A summary of submissions was published in May 2008 (Ministry for the Environment, 2008c).

The proposals for regulations for transmission activities have been revised to take account of general and detailed comments by submitters. Appendix 2 contains a more detailed discussion of the submissions received and how they have been taken into account. The proposals for regulations to protect transmission lines from inappropriate third-party activities (the risks NES) are currently being re-examined, for two reasons.

• The final NPS (finalised after the release of the discussion document on proposals for the NES) contains specific policies concerning third-party activities which were not in the proposed NPS. As a result, the transmission risks NES, as it stands, does not fit as well with the final NPS as it did with the earlier version.
• Submitters were concerned at the potential effects on adjacent land owners; in particular, the cost of obtaining resource consent for activities near transmission lines, and the potential reduction in land values due to a restriction in the activities that could be carried out. They felt that the potential costs to land owners, and to local authorities for implementing the proposed third-party risks NES, had been grossly underestimated and that only Transpower would benefit.

1.2 Purpose

This document presents an analysis of the proposed NES for Transmission Activities. The analysis is aimed at fulfilling the requirements of section 32 and section 44 of the RMA. Chapters 3 and 5 address section 32 requirements for considering alternatives and the efficiency and effectiveness analysis, respectively. The section 44 requirements for consultation, reporting and recommendations are covered throughout chapter 4 and in Appendix 2, which summarises the key issues raised by submitters on the proposed NES.

1.3 Scope

This document considers provisions in district and regional plans for the operation, maintenance and upgrading of the electricity transmission network (transmission activities). It does not cover the establishment of new transmission lines. Early investigations showed that there are adequate provisions in plans for assessing the construction of new lines, either through the resource consent process or by Transpower issuing notices of requirement for designations. Also, it does not address major upgrades involving significant changes to infrastructure: it is envisaged that these upgrades would be considered in the same way as the construction of new lines. The key areas of concern identified in the early stages of policy development were the ability to undertake maintenance and upgrading of transmission lines without unnecessary resource management constraints.

As already noted, this document does not address risks to the national grid resulting from third-party activities, nor does it address risks the national grid might pose to third parties. The Ministry for the Environment consulted on the proposed transmission risks NES (Ministry for the Environment, 2007). As a result of general opposition to this part of the originally proposed regulations (Ministry for the Environment, 2008), the Ministry decided not to proceed with the proposed transmission risks NES at this stage.

1.4 RMA section 32 evaluation and report: methodology

There are two main aspects to the test of appropriateness:

• weighing up alternative objectives to determine which one will provide environmental outcomes that will best meet the purpose of the RMA
• being satisfied that the objective chosen can best be achieved through the RMA rather than through some other mechanism.

Getting a measure of effectiveness involves assessing how well a given mechanism or tool might work. The relative efficiency of different alternatives is more difficult to determine, and involves examining costs and benefits. A measure of efficiency is the extent to which the proposed method achieves the purpose of the Act compared to the magnitude of what is foregone as a result of using this method. Such an assessment involves calculating and comparing the net benefits against the net costs (environmental, social and economic). The higher the benefits-to-cost ratio, the more efficient the option is (Ministry for the Environment, 2000).

A detailed cost−benefit analysis comparing the NES to continuing with the status quo (in terms of cost and time savings) was completed as background to this report and has been used to inform the wider analysis featured here.

1.5 RMA section 44 evaluation

Section 44 of the RMA details the power of the Minister for the Environment to make NES. Before the Minister recommends an NES to the Governor-General, he or she must notify the public and iwi authorities of the proposed subject matter of an NES and the reasons for considering that the NES aligns with the purpose of the RMA. The Minister for the Environment must also provide adequate time and opportunity for parties to comment on the subject matter, and publicly notify a report on submissions and recommendations.

The requirements of section 44 of the RMA are:

The Minister must not recommend to the Governor-General the making of any national environmental standard unless the Minister has –

(a) notified the public and iwi authorities of –

(i) the proposed subject matter of the standard; and
(ii) the Minister’s reasons for considering that the standard is consistent with the purpose of the Act; and

(b) established a process that –

(i) the Minister considers gives the public and iwi authorities adequate time and opportunity to comment on the proposed subject matter of the standard; and
(ii) requires a report and recommendation to be made to the Minister on those comments and the proposed subject matter of the standard; and

(c) publicly notified that report and recommendation.