Executive Summary

The proposed National Policy Statement on Electricity Transmission (the NPS) is intended to provide national direction on the sustainable management of the electricity transmission network and, in particular, to raise the status of electricity transmission to one of national significance when considering resource management proposals.

This report provides an evaluation of the NPS in accordance with section 32 of the Resource Management Act 1991 (RMA). A section 32 evaluation requires four inter-related examinations:

1. The extent to which each objective is the most appropriate way to achieve the purpose of the RMA. ["The purpose of this Act [the RMA] is to promote the sustainable management of natural and physical resources.][In this Act, sustainable management means managing the use, development, and protection of natural and physical resources in a way, or a rate, which enables people and communities to provide for their social, economic, and cultural wellbeing and for their health and safety while -][(a) sustaining the potential of natural and physical resources (excluding minerals) to meet the reasonably foreseeable needs of future generations; and][(b) safeguarding the life-supporting capacity of air, water, soil, and ecosystems; and][(c) avoiding, remedying, or mitigating any adverse effects of activities on the environment."]

2. Whether, having regard to their efficiency and effectiveness, the policies, rules or other methods are the most appropriate for achieving the objectives.

3. The benefits and costs of policies, rules or other methods.

4. The risk of acting or not acting if there is uncertain or insufficient information about the subject matter of the policies, rules or other methods.

Following is a summary of the section 32 evaluation.

1. To what extent is the objective the most appropriate way to achieve the purpose of the RMA?

The objective of the NPS is "to recognise the national significance of the electricity transmission network".

The objective has been found to be generally appropriate in fulfilling the purpose of the RMA. In particular, the objective acknowledges that electricity supply, through the electricity transmission network, is nationally significant and a beneficial physical resource. When evaluated against potential alternatives, the NPS objective offers a more complete response and a more cost-effective solution.

2. Are the policies proposed the most appropriate for achieving the objective?

Policies 1 and 2 are appropriate in scope and specify the national benefits that support the main intent of the NPS objective. The matters addressed in policies 3, 4, 5 and 6 are addressed variably by local authority planning documents, often without specific reference to electricity transmission. The inclusion of these policies is appropriate in supporting the objective, but also depends on how local authorities will implement them.

3. What are the benefits and costs of the proposed policies?

The quantifiable benefits of the NPS and its policies would stem largely from cost savings for Transpower of some hundreds of thousands of dollars it currently spends on plan advocacy, RMA appeals and applications each year.

Benefits could also accrue nationally if grid capacity improvements, facilitated by the NPS, encouraged the development of more renewable energy generation, subject to the grid improvement itself passing a benefit−cost test. Another benefit may be a more secure national grid. Some of these benefits may be passed on to electricity consumers as a reduction in Transpower charges and improvements in network security and operation.

The costs of the status quo are likely to escalate as demands on the electricity system grow and require further upgrades and extensions of the transmission network. The benefits of ironing out any undue impediments and costs from the environmental management issues around the transmission grid will increase in future years.

Costs are likely to stem largely from costs to local government in changing plans to recognise the NPS, to government in implementing the NPS, and to some landowners adjoining the transmission network who may have their future activities further curtailed.

4. What are the risks of acting or not acting if there is uncertain or insufficient information about the subject matter of the proposed policies?

The key areas of uncertainty or limited information have been identified as the potential cost to third parties from implementing the NPS. The risks of acting or not acting on this uncertainty, where more or better information might become available, are indeterminate but are expected to be low rather than high.

The main purpose of the NPS is to elevate the status of electricity transmission as a consideration under the RMA. Current information suggests the transmission network will need to increase in its extent, especially over the next decade. In the absence of an NPS, unnecessary relitigation over the importance of electricity transmission and any subsequent delay could result in risks to electricity supplies and the facilitation of renewable electricity generation.

Proceeding with the NPS, through a Board of Inquiry process, will involve further testing and investigating its purpose, including uncertainties.