Supplementary Order Paper No 244

No 244

House of Representatives

Supplementary Order Paper

Tuesday, 2 September 2008

Commerce Amendment Bill


Proposed amendments

Hon Lianne Dalziel, in Committee, to move the following amendments:

Clause 4: new section 52S(1)(b)

Subparagraph (i) : to insert after “prices” (line 29 on page 22) the words “(which may not include the legal costs of any appeals against input methodology determinations under this Part or of any appeals under section 91 or section 97)”.

Clause 4: new section 53P

Subsection (5): to omit service (line 17 on page 38) and substitute services.

Subsection (5A): to insert the following subsection after subsection (5) (after line 19 on page 38):

  • (5A) When setting the rate of change, the Commission may take into account the effects of inflation on the inputs of suppliers of the relevant goods or services.

Clause 4: new section 54B

Subsection (2)(f) to (h): to omit these paragraphs (lines 16 to 22 on page 50) and substitute the following paragraphs:

  • (f) conveying electricity if the total circuit length of all of the prescribed voltage electric lines provided by the supplier (or over which electricity is conveyed by the supplier, as the case may be) is less than 25 kilometres:

  • (g) conveying electricity if the total amount of electricity conveyed to consumers by the supplier is less than 20 gigawatt hours per annum:

  • (h) conveying electricity if the total number of consumers to whom the supplier conveys electricity is less than 500.

Subsection (2A): To insert the following subsection after subsection (2) (after line 22 on page 50):

  • (2A) The prescribed voltage electric lines, the electricity conveyed, or the number of consumers to whom electricity is conveyed, when measured in relation to a supplier include, for the purposes of subsection (2)(f) to (h), the lines provided by, electricity conveyed by, or number of consumers of, any associate of the supplier.

Clause 4: new section 54T

To omit this section (lines 1 to 21 on page 66) and substitute the following section:

54T Procedure before jurisdiction order can be made
  • The Minister of Energy may make a recommendation for the purpose of section 54R only if—

    • (a) he or she has consulted with Transpower, users of the national grid, and representatives of consumers; and

    • (b) he or she has consulted with the Electricity Commission and the Commerce Commission and has sought a recommendation from each of them; and

    • (c) he or she is satisfied that the transfer of jurisdiction that would occur would result in—

      • (i) the purpose of this Part being achieved more efficiently and effectively; and

      • (ii) the purposes of the Electricity Act 1992, as it applies to Transpower, being achieved more efficiently and effectively; and

      • (iii) lower compliance costs for Transpower.

Clause 4: new section 55A

Subsection (2)(b) and (c): to omit these paragraphs (line 34 on page 68 to line 3 on page 69) and substitute the following paragraph:

  • (b) conveying natural gas if the total amount of gas conveyed to consumers by the supplier is less than 75 000 gigajoules per annum:

Subsection (2A): to insert the following subsection after subsection (2) (after line 5 on page 69):

  • (2A) The gas conveyed, when measured in relation to a supplier includes, for the purposes of subsection (2)(b), the gas conveyed by any associate of the supplier.

Subsection (3): to insert the following definition before the definition of consumer (after line 6 on page 69):

associate has the same meaning as in section 12 of the Electricity Industry Reform Act 1998

Schedule: item relating to Methanex New Zealand Limited in new Schedule 6

To insert the following item after the second item in the second column (page 100):

  • Faull Road Mixing Station–Motunui Plant main process gas pipeline


Explanatory note

This Supplementary Order Paper proposes a number of changes as follows:

  • section 52S(1)(b)(i): the Bill currently provides for input methodologies to identify any costs that can be passed through to prices. The amendment clarifies that input methodologies cannot provide for the legal costs of appeals to be passed through to prices:

  • section 53P: the amendment to subsection (5) corrects an error. New subsection (5A) confirms that, when resetting the rate of change applying to suppliers subject to default price-quality regulation, the Commission may take into account the effects of inflation on suppliers' inputs:

  • section 54B: these amendments tidy up the definitions of some of the electricity lines services that are exempted from the provisions of subpart 9:

  • section 54T: this amendment replaces the new criteria section for decisions on whether the Commerce Commission's jurisdiction under Part 4 should be transferred to the Electricity Commission. The Bill as introduced provided powers to transfer jurisdiction for all or any electricity lines services. The Commerce Select Committee recommended that the power to transfer jurisdiction (section 54R) be limited to Transpower only, so this SOP makes a consequential change to section 54T to limit the criteria and consultation requirements to Transpower and transmission issues:

  • section 55A: these amendments remove subsection (2)(c), which exempted from the provisions of subpart 10 gas pipeline services that convey natural gas for supply to industrial and commercial consumers located within 1 kilometre of a gas station or existing gas pipeline. The Commerce Commission has advised that subsection (2)(c) would be difficult to administer. Suppliers of affected pipelines would be able to apply for inclusion in the Schedule of excluded pipelines (which is Schedule 6). The amendments also tidy up another of the definitions of the gas pipeline services that are exempted from the provisions of subpart 10:

  • Schedule 6: this amendment reinstates the exemption for the Faull Road Mixing Station–Motunui Plant main process gas pipeline, currently owned by Methanex. The reinstatement has the effect of exempting this pipeline from the provisions of subpart 10. Apparently, there are 2 parallel pipelines from Faull Road to the Motunui plant, only one of which is now owned by Energy Infrastructure Limited and Petroleum Infrastructure Limited.