New Zealand Legislation: Bills

8 New headings and sections 17 to 17F substituted

• Section 17 and the heading above section 17 are repealed and the following sections and headings substituted:

  “Ownership separation

  “17 Ownership restrictions on connected electricity businesses

  • “(1) No person who breaches the connected generation cap may be involved in the relevant line, and vice versa.

    “(2) No person who breaches the connected customers selling cap may be involved in the relevant line, and vice versa.

  “17A Connected generation cap rule

  • “(1) The connected generation cap is breached by a person if—

    • “(a) any of the person’s connected generation was commissioned before 20 May 2003; or

    • “(b) the person’s connected generation has a total capacity (determined according to nameplate or nameplates) that exceeds the greater of—

      • “(i) 50 MW; or

      • “(ii) 20% of the average of the maximum demand, in the immediately preceding 3 financial years, on the local network area.

    “(2) Generation where the total capacity (determined according to nameplate or nameplates) of the generator is 5 MW or less is counted for the purpose of this section (regardless of when it was commissioned) unless it falls within section 17B(c).

    “(3) This section is subject to section 17B.

  “17B Small or encouraged connected generation not counted for purpose of connected generation cap

  • The following connected generation is not counted for the purpose of section 17A:

    • “(a) generation commissioned on or after 8 August 2001 if the electricity generated from it is produced only from renewable energy sources:

    • “(b) generation commissioned on or after 8 August 2001 if the electricity generated from it is produced partly from renewable energy sources, as long as fossil fuels provide no more of the total fuel energy input for the generator or generators comprising the generation plant in any 12-month period than—

      • “(i) 20%; or

      • “(ii) any larger amount approved by the Minister (on the conditions, if any, he or she thinks fit) after first taking into account whether or not the generation uses new or advanced technology:

    • “(c) generation where the total capacity (determined according to nameplate or nameplates) of the generator is 5 MW or less if the generation was owned or operated, directly or indirectly, by the relevant person—

      • “(i) before 23 June 1998; and

      • “(ii) continuously between that date and the date when the person seeks to count that generation for the purposes of section 17A:

    • “(d) generation that is disregarded under section 19.

  “17C Connected customers selling cap rule

  • “(1) The connected customers selling cap is breached by a person if the person is involved in selling more electricity to connected customers within a local network area, in total, in a financial year, than the equivalent of the person’s qualifying generation within the local network area.

    “(2) The person’s qualifying generation is the sum of the total annual nominal MWh capacity of the following generation (calculated as if the generation were operated at total capacity (determined according to nameplate or nameplates) for 24 hours for 365 days per annum):

    a + b + c

    where—

    a

    is the person’s connected generation that is within the connected generation cap in section 17A; and

    b

    is any connected generation referred to in section 17B(a), (b), or (c) in which the person has an involvement; and

    c

    is any new generation referred to in section 17B(a) or (b) that is connected to the national grid, if,—

    • (a) on application by or on behalf of the person, the Commission has determined, by notice in the Gazette, that the generation should be treated as being within the local network area of the lines in which the person is involved; and

    • (b) the total capacity (determined according to nameplate or nameplates) of all generation in which the person has an involvement does not exceed 100 MW.

    “(3) The Commission may not determine that any generation should be treated as being within more than 1 local network area.

  “Corporate separation and arm’s-length rules

  “17D When corporate separation and arm’s-length rules apply

  • The corporate separation and arm’s-length rules apply if a person has an involvement in—

    • “(a) more than 10 MW (determined according to nameplate or nameplates) of connected generation (including any connected generation referred to in section 17B and any generation that the Commission has determined under section 17C(2) should be treated as being within the local network area); or

    • “(b) selling more than 87 600 MWh (which is 10 MW operated at 24 hours for 365 days per annum) of qualifying generation to connected customers in a financial year.

  “17E What corporate separation and arm’s-length rules require

  • “(1) The corporate separation rules require that every person or persons who carry on the connected electricity businesses must carry on the business involving the relevant line in a different company from the company that carries on the business involving the qualifying generation or the selling to connected customers.

    “(2) The arm’s-length rules require that every person who is involved in either of the connected electricity businesses must comply, and ensure that the person’s electricity businesses comply, with the arm’s-length rules.

  “Exemption for Transpower

  “17F Exemption for Transpower New Zealand Limited for purpose of deferring investment in national grid

  • “(1) In this section, unless the context otherwise requires, Transpower means Transpower New Zealand Limited and any subsidiary of or successor to that company.

    “(2) This section applies if, and to the extent to which, Transpower contracts with another person for that person to generate electricity for the purpose of deferring the need for investment by Transpower in the national grid.

    “(3) Transpower is not involved in that person’s electricity generation for the purposes of this Act.”