The parties hereto shall forthwith establish a Committee to be called the Tauranga Joint Generation Committee (hereinafter called “the Committee”) which shall be constituted as follows:

The Committee shall consist of eight (8) persons, four of whom shall be appointed by the Council from its members and four by the Board from its members and such appointments shall be made within one month after the date of the execution of these presents.

The members of the Committee shall be appointed after the first appointment within one month next after each triennial local body elections and the members shall continue in office until theirsuccessors are appointed provided that either party may at any time revoke the appointment of any of its members and appoint another member in his stead.

A member of the Committee may resign his office at any time by notice in writing addressed to the Secretary of the Committee and in that event or in the event of his death or in the event of his ceasing to be a member of the Council or the Board the vacancy thus occurring shall be filled forthwith by that party whose appointee had so resigned ceased to be a member or died. The person filling the vacancy thus occurring shall subject as aforesaid continue in office for the residue of the term of the person so ceasing to be a member.

At the first meeting of the Committee and at the first meeting of the Committee after every succeeding triennial local body elections the Committee shall elect one of its members to be Chairman of the Committee who shall hold office for one year, when a new election shall take place. At every meeting for the election of a Chairman the Secretary shall preside and in the case of an equality of votes the Chairman shall be determined by lot in such manner as the Secretary shall decide.

No business shall be transacted by the Committee except at meetings at which there is a quorum which shall consist of not less than two members from each party.

In the event of any member of the Committee not being able to attend a meeting the Mayor or Town Clerk of the Council or the Chairman or Secretary of the Board respectively may by notice to the Secretary of the Committee appoint a substitute for such member from the members of the Council or the Board as the case may be and such substitute shall at the meetings at which he attends have all the rights and powers of a member of the Committee.

Notices of meetings of the Committee shall be sent to each member of the Committee not less than forty-eight (48) hours prior thereto and shall contain reasonable information as to the business to be transacted thereat. Members present may by unanimous decision consider any ordinary business introduced without notice. Each party shall have the right to have any of its executive staff present at all meetings except where they are excluded by resolution of the Committee.

The Committee shall not have the power to take or acquire land, to hold licences to borrow money, or levy rates but such land and buildings lines and licences as may be requisite or expedient to be acquired and held shall be acquired and held by the parties hereto as tenants in common in equal shares and upon and subject to the purposes and conditions of these presents, but if the parties agree may be held by any party solely or in unequal shares.

The parties hereto do hereby delegate to the Committee, save as herein specifically reserved, full power and authority to explore, investigate, and exploit the said scheme for generation of hydro-electricity and for that purpose to enter into contracts and engage such consultants, contractors, engineers, clerks, and servants as may be necessary or expedient, on such terms and at such remuneration as the Committee determines provided always and it is hereby expressly agreed and declared by and between the parties hereto that so far as practicable the staff, equipment, and offices of the parties or one of them shall be employed by the Committee in and about the said exploration, investigation, and exploitation of the said scheme upon such terms as to remuneration and otherwise as the Committee shall agree with such party or parties.

The Committee is hereby empowered to control the generation of electricity and the loads of the parties hereto for their joint benefit and for that purpose shall appoint an officer who shall (if required by either party) be independently employed by the Committee and who under the Committee shall be responsible for the exercise of such controls.

The Committee shall make regular monthly reports to and submit copies of all minutes and regular reports on all business to each of the parties hereto and shall receive and consider all comments and recommendations made to it by either of the parties hereto.

Immediately upon its constitution the Committee shall take all necessary steps for the exploration, investigation, and exploitation of the said scheme and shall give priority to the development of the upper or Mangapapa Station and so as to preserve for as long as possible the full operation of the existing McLaren’s Falls and Omanawa Stations.

The Committee shall open one or more bank accounts with a trading bank into which shall be paid all moneys received by the Committee and all payments shall be made by cheque or other negotiable instrument. The Committee shall from time to time authorise an officer or member of the Committee to endorse cheques or other negotiable instruments payable to the Committee and any two persons of whom at least one shall be a member of the Committeeand the other a member or officer of the Committee or an officer of the Council or Board to sign cheques and withdrawals from the said accounts.

The accounts of the Committee shall be maintained as from time to time agreed by the parties with the approval of the Controller and Auditor General but subject to the following:

So far as may be practicable and until the completion of the lower or Ruahihi Station the Council shall be at liberty to continue to operate and maintain the McLaren’s Falls Station at its own expense and for its own purposes.

Operation by Council of Omanawa Station—When the normal output of Omanawa Station ceases or is reduced due to the activities of the parties hereto, the Council shall be entitled to a supply of electricity equal to the difference between the production of the Omanawa Station and the capacity of that station as stated hereunder from joint generation by the Committee on a unit basis at the actual annual cost of generation and transmission as defined in clause 13 hereof. For the purposes of this clause the capacity of Omanawa Station shall be deemed to be at the rate of 700 kilowatts of demand and 5.6 million kilowatt hours of electricity per annum. When clause 3 hereof operates this supply shall cease and merge with the supply of electricity provided in clause 3 hereof, viz., 3,500 kilowatts of demand and 22 million kilowatt hours of electricity per annum provided that the rate charged for electricity received by the Council pursuant to this clause shall not exceed the rate then current charged by the New Zealand Electricity Department to the Committee for electricity supplied and provided that if for any reason the water to be diverted from Omanawa River cannot be used at Mangapapa or Ruahihi the Council shall be at liberty to utilise such waters not so used through its Omanawa Falls Station.

From the time when McLaren’s Falls Station shall be acquired by the parties hereto, the Council shall be entitled to receive from the Committee at the actual cost of generation and transmission on a unit basis electricity amounting to 3,500 kilowatts of demand and 22 million kilowatt hours per annum for a period of twenty-one (21) years next after the said McLaren’s Falls Station shall be acquired by the parties hereto provided that the rate charged for electricity received by the Council pursuant to this clause shall not exceed the rate then current charged by the New Zealand Electricity Department for electricity supplied. The actual cost of generation and transmission for the purposes of this clause shall comprise the charges set out in paragraphs (a) to (e) of clause 13 both inclusive hereof.

From the expiration of the period of twenty-one (21) years defined in the preceding clause 3(a) the Council shall be entitled to receive from the Committee at the actual cost of generation and transmission on a unit basis electricity amounting to not less than 3,500 kilowatts of demand and 22 million kilowatt hours per annum for a period of nineteen (19) years thereafter provided that the rate charged for electricity received by the Council pursuant to this clause shall not exceed the rate then current charged by the New Zealand Electricity Department for electricity supplied. The actual cost of generation and transmission for the purposes of this clause shall comprise the charges set out in paragraphs (a) to (e) of clause 13 both inclusive hereof.

The generation of electricity beyond that required to supply the Council’s entitlement under clauses 2(b) and 3(a) as hereinbefore set out shall be distributed between the parties to these presents in proportion to their several consumptions in their respective areas of supply as defined in clause 21 hereof save that for the period defined in clause 3(b) hereof the Council shall be entitled to the minimum therein prescribed.

The Committee shall at all times keep the parties hereto fully informed of all details of the proposed works and cost thereof and the parties hereto agree that these costs together with preliminary expenses including all proper expenses already incurred by the Council and by the Board shall be raised by way of loan each of the parties accepting responsibility for one half share thereof.

Should one of the parties hereto (whether before or after receiving details of the cost of the proposed works) decide not to proceed with the further exploration of the said scheme it shall notify the other party to this effect and that other party shall be entitled to proceed with the said scheme as its own undertaking and the party so giving notification of its withdrawal shall give such consents do and perform all such acts deeds matters and things and execute all such documents as may be necessary or expedient for obtaining approvals and vesting the said scheme and any property involved therein and the relevant licence in the party so desiring to proceed with the said scheme.

If neither party shall desire to proceed with the said scheme then in that event the preliminary costs of investigation shall be borne equally by the parties hereto.

If only one party elects to proceed with the said scheme then the full preliminary and investigation expenses in respect of the said scheme shall be paid by that party.

If the Council shall give notice of its desire to withdraw then it shall be entitled to continue pursuant to its aforesaid licences the operation of the Omanawa and McLaren’s Falls Stations and the Board shall be at liberty to proceed with the said scheme authorised by the said joint licence and for such purpose it may use the waters of the Omanawa River and divert the same from above the Council’s present Omanawa Station into McLaren’s Lake provided that in so proceeding with the said scheme it shall not reduce the normal flow of water (inclusive of the waters of the Omanawa River) to the McLaren’s Falls Station and provided further that such use and diversion of the Omanawa River shall not in respect of the generation of electricity render the Board liable to the Council for compensation or damages.

No notification of withdrawal from the said scheme shall be valid without the consent of the other party after the first contract shall have been let by the Committee for any construction works on the said scheme other than access roads in connection with the said scheme, or other than any preliminary or experimental work authorised by the Committee.

The parties hereto agree that all service charges of loans including capital repayments and the costs of operation of the stations for the generation of electricity on the Mangapapa and Ruahihi Streams shall be a first charge on the revenue from the sale of the electricity generated by the said stations.

The Council shall upon the date for payment hereinafter specified vest in the parties hereto as tenants in common in equal shares all the lands, buildings, improvements, and plant set out in the First Schedule hereto and the Committee shall out of loan moneys pay to the Council the sum of two hundred and one thousand nine hundred and forty-seven pounds (£201,947) being the agreed value of the said lands, buildings, improvements, and plant and such sum shall be paid in cash on the date on which electricity is available to both parties from both the Mangapapa and Ruahihi Stations or from the Ruahihi Station only in the event of that station being proceeded with alone by the Committee and thereupon the parties hereto shall be deemed to have taken over McLaren’s Falls Station for their joint purposes in accordance with the provisions of this deed.

Whereas the main arch dam and part of the power house building mentioned in the First Schedule hereto are erected on Crown land it is agreed by the parties hereto that the Council will forthwith take all steps which may be necessary or appropriate to vest the land on which the same are erected in the parties hereto in accordance with the foregoing provisions of this clause, provided that the parties agree to accept the best title available thereto.

For the purposes of calculating the price to be paid by the Council to the Committee for the balance of the electricity supplied by the Committee during the periods specified in clauses 2(b) and 3(a) over and above the preferential supply of electricity provided for in the said clauses 2(b) and 3(a) and the price to be paid by the Board for all electricity supplied by the Committee to the Board during the said periods the following provisions shall apply:

The total annual cost of generated and purchased electricity as defined in clause 13 hereof, after deducting therefrom the amount to be paid by the Council in terms of clauses 2(b) and 3(a) hereof during the period the Council is entitled to receive such supply, shall be apportioned between the parties proportionately to their notional respective accounts had all the electricity which each party received from the Committee, excluding in the case of the Council the quantity of its preferentialsupply of electricity provided for in clauses 2(b) and 3(a), been charged at the rate or rates payable by the Committee to the New Zealand Electricity Department then current provided that the notional accounts shall be computed at the time or times when the charge for such electricity is incurred by the Committee from the New Zealand Electricity Department and no regard will be taken of any maximum demand or other basis of charging recorded by any party that does not affect the amount payable by the Committee to the Department.

The Committee shall render to each party accounts quarterly but there shall be if necessary an annual reconciliation and each party shall pay an assessed monthly sum on account of its quarterly dues.

On the expiration of the preferential supply of electricity to the Council as provided for in clause 3(a) hereof the cost of electricity shall be apportioned between the parties in the following manner:

The total cost of the generated and purchased electricity as defined in clause 13 hereof shall be apportioned between the parties proportionately to their notional respective accounts had all the electricity which each party received from the Committee been charged at the rate or rates payable by the Committee to the New Zealand Electricity Department then current provided that the notional accounts shall be computed at the time or times when the charge for such electricity is incurred by the Committee from the New Zealand Electricity Department and no regard will be taken of any maximum demand or other basis of charging recorded by any party that does not affect the amount payable by the Committee to the Department provided further that the apportionment of such cost payable by the Council shall allow credit for the rights of the Council pursuant to the provisions of clause 3(b) hereof.

Electricity received by either party by way of feed-back or the installation of peak load reducing or other generation stations shall be taken into account only to the extent that such electricity would not adversely affect the other party’s purchase cost of power pursuant to the provisions of this deed.

If either party becomes dissatisfied with the method of charging set out in this clause, that party may require the Council and the Board to review this clause and in default of an agreed decision the question shall be referred to arbitration as hereinafter provided.

The lands described in the Second Schedule hereto are and shall remain the property of the Council but the Committee shall be entitled to use such parts thereof as it may reasonably require and on such terms and conditions as the Committee and Council may agree.

It is acknowledged that the spillway dam, channel footbridge, and intake structure with gates and screens and part of the pressure tunnel mentioned in the First Schedule hereto are erected on part of the lands described in the Second Schedule hereto and notwithstanding the foregoing provisions of this clause the Council shall permit the continued use of the same without the imposition of any terms or conditions.

In the event of any works of the Committee injuriously affecting interfering with or damaging property of the Council the Council shall be entitled to full compensation which shall be paid by the Committee and shall be deemed to be part of the total cost of generated and purchased electricity.

Without limiting the generality of the foregoing provision it is hereby agreed and declared that if the works of the Committee shall require the flushing out or desilting of the artificial lake above McLaren’s Falls Dam the expenditure incurred in respect thereof and of all operations necessitated in respect of the lake arising out of the exercise by the Committee of its functions shall both as to capital and maintenance costs be borne by the Committee and form part of the total cost of generated and purchased electricity.

Both parties agree to take all such steps as may be necessary or desirable to promote the enactment of all legislation or other authorities which may be required to give full effect to and validate the provisions of this deed and the operations specified therein and to the confirmation of the privileges and authorities set out in the joint licence.

Both parties further agree to promote and support such further Orders in Council or other Acts or authority as may be required by either or both of them for the full common implementation of the said scheme.

In these presents the term “total annual cost of generated and purchased electricity” shall be deemed to include the annual net cost of electricity purchased from or interchanged with the New Zealand Electricity Department by the Committee after allowance for any electricity sold to the New Zealand Electricity Department and the total annual cost of generation and transmission of electricity incurred by the Committee. The total annual cost of generation and transmission shall include:

That from the completion of the said scheme by the Committee all electricity required by each of the parties hereto for existing areas of supply as defined in clause 21 hereof, other than electricity received by either party pursuant to a feed-back arrangement with consumers who generate all or part of their own supply, shall, subject to the provisions of this deed, be purchased through the Committee.

In the event of the parties hereto requiring to take over any lands buildings improvements or plant of the Council other than those specified in the First Schedule hereto then subject to the approval of the Council such assets shall, after the Council ceases to operate the McLaren’s Falls Station, be acquired and vested in the parties hereto as tenants in common in equal shares and shall be paid for out of loan moneys by the Committee at a fair valuation thereof and the cost of such assets shall be deemed to form part of the total cost of generated and purchased electricity.

It is agreed that pursuant to the foregoing provisions of this clause the parties shall acquire from the Council at a time to be agreed upon between the Council and the Committee the transmission lines of the Council running from McLaren’s Falls Station to the substation of the New Zealand Electricity Department at Greerton such purchase to be paid for out of loan moneys.

The Committee shall transmit the electricity generated at 50 kilovolts or such other voltage as may be agreed upon by the parties hereto from time to time to the New Zealand Electricity Department Greerton Substation or a suitable substation to be provided by the Committee so as to facilitate inter-connection between the New Zealand Electricity Department and the Committee and in any case these arrangements shall be made so that the Council and the Board each retain a direct supply line to the New Zealand Electricity Department for which they may continue to hold a licence.

The Council and the Board shall each take electricity from the Committee at the aforesaid substation at 50 kilovolts or other agreed voltage.

The Board shall continue to take supply from the New Zealand Electricity Department at Mount Maunganui and other substations and such electricity shall be included in the apportionment referred to in clause 9 hereof.

Transformation from 50 kilovolts to another voltage shall be at the cost of the party concerned.

Meters—

That the Board will give all consents and do all things reasonably necessary to facilitate the grant of a licence for and erection by the Council of its transmission lines along a route between the Substation at Greerton or any other Substation and the boundary of the City’s area of supply which does not interfere unduly with the Boards’ distribution system.

In the event that either party should desire to explore the possibility of additional generation of electricity for the benefit of the inhabitants of its district as from time to time constituted it shall consult with the other party for the purpose of ascertaining whether or not such additional generation can be made available for the benefit of the inhabitants of the districts of both parties and as to whether the parties could reach mutual agreement for the exploitation thereof.

If agreement is not reached and one party proceeds alone, the Committee shall take as much electricity as it may require in lieu of State power at a price to be agreed to by the parties hereto provided that if either party provides additional generation and the Committee does not take all or any part of such electricity that party may dispose of such electricity as it thinks fit but not so as to reduce its requirements from the Committee without the Committee’s prior consent to a point whereby the requirements of both parties shall be less than the full utilisation of the said scheme.

In the event of the parties failing to agree to a price then the price shall be determined by arbitration but in no case shall the price exceed the equivalent State price then current.

In the event of the legislation or authorities referred to in clause 12 hereof not being enacted the parties shall bear equally between them all costs and expenditure incurred by either of them in exploration investigation and implementation of the said scheme.

All differences and disputes which shall arise between the parties hereto touching or concerning the premises or any act, deed, matter, or thing to be done, suffered or remitted in pursuance hereof or touching or concerning the construction of these presents shall be referred to arbitration in accordance with the provisions of the Arbitration Act 1908 or any amendment thereto or re-enactment thereof for the time being in force.

The arbitration shall be conducted by one arbitrator if the parties agree and if not then by two arbitrators one to be appointed by each party and the umpire (who shall not hold a Government appointment to any electrical body or be a public servant) appointed by such arbitrators immediately after they are themselves appointed.

Both parties enter into this agreement for the benefit of the consumers in their respective areas of supply and each undertakes to respect the territorial integrity of the other’s area of supply by not seeking to enter for the purpose of electricity supply in or to take over such area or any part thereof and to refrain from advocating the same.

For the purposes of apportionment of the supply of electricity to the parties pursuant to this deed the basis of consumption shall be that occurring from time to time in their respective areas of supply as constituted at the date hereof and as may be hereafter amended by any minor boundary adjustments.

The terms of this deed may be amended from time to time by agreement between the parties hereto with the consent of the Minister of Electricity.

The marginal notes to this deed shall be for purposes of reference only and shall not affect the interpretation thereof.

In witness whereof these presents have been executed the day and year first hereinbefore appearing.