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Proposed National Environmental Standards for Electricity Transmission: Discussion Document

Executive summary

1 Introduction

2 Sustainable management of electricity transmission

3 What are the options?

4 Proposed solution: national environmental standards (NES)

5 Evaluation of the proposed national environmental standards: costs and benefits

6 Implementing the national environmental standards

7 Next steps in developing a national environmental standard

Appendix 1: Proposed National Policy Statement on Electricity Transmission

Appendix 2: Evaluation of options

Appendix 3: A history of electricity transmission controls in New Zealand

Appendix 4: Proposed NES for transmission activities

Appendix 5: Proposed NES: activities that could put transmission lines at risk

Glossary and definitions

References

2 Sustainable management of electricity transmission

2.1  What is electricity transmission?

The electricity transmission network refers to the pylons, wires and substations that make up the national grid.¹ Transpower New Zealand Ltd (Transpower), a state-owned enterprise, is the asset owner and system manager of the electricity transmission network.

2.2  Special characteristics of electricity transmission

National importance

New Zealand’s current economic activity and future economic growth rely on a secure supply of energy, particularly electricity. The wellbeing of New Zealanders depends on a supply of affordable and sustainable energy to power their homes and businesses.

Demand for electricity has been growing at 2% per year, and is predicted to continue growing at 1.3% per year in the future (Ministry of Economic Development, 2006). This is likely to place increasing pressure on the transmission network. Investment to enhance the national grid infrastructure trebled in 2006 to over $300 million compared with an average expenditure of $100 million per annum over the last decade. Annual expenditure is expected to continue to increase. A proportionate level of increase in requirements for RMA approvals for maintenance and upgrade work can also be expected.

Now and in the foreseeable future new electricity generation is likely to be from medium- to large-scale generation remote from where most of the electricity is used (the demand centres). This will be especially so if the Government’s objective that the majority of new electricity generation be from renewable sources, set out in the draft New Zealand Energy Strategy, is to be fulfilled. A robust grid to support renewable electricity supply is essential, because the intermittent nature of renewable electricity resources puts more pressure on the grid.

Security of electricity supply at affordable prices relies on having a resilient national grid, but grid constraints could result in planned and unplanned interruptions to supply, higher electricity prices, and renewable energy projects being unable to access the grid. Building and maintaining a robust national grid in a sustainable manner requires ongoing maintenance to prevent equipment failure disrupting supply, as well as upgrading the capacity of existing lines to cope with increased pressure on the grid. This in turn requires:

• appropriate controls on the environmental effects of electricity transmission
• a framework of consent requirements that enables the grid operator to operate without unnecessary constraints or delays
• appropriate controls on activities carried out adjacent to transmission lines that could put the national grid at risk.

A recent example of how a lack of maintenance can disrupt supply involved most of southern and central Auckland - including the central business district - losing power for between one and eight hours on Monday 12 June 2006. The blackout was caused by the failure of two corroded shackles during high wind. At an estimated cost of $20,000 per kW hour of lost load, the estimated total cost of the blackout (based on Transpower’s records of lost load) is $70 million. Although the maintenance problem in this case was not the result of RMA constraints or delays, the example illustrates the potential economic cost of disruption to electricity supply through factors such as disruption to businesses, lost productivity and the cost of backup generation.

National and local benefits and costs

All electricity consumers benefit from a robust national grid, through a secure and reliable electricity supply at affordable prices. However, the negative aspects or costs, such as the effects of vegetation removal and visual impacts of the transmission network, are felt most acutely at a local level. Also, transmission lines cross private land, and landowners may be restricted in the activities they can carry out near the lines. As a result, in making decisions on electricity transmission activities local authorities need to balance the national and local benefits with these local costs.

Linear nature of the network

Transmission is a linear, meshed network. A single transmission line (circuit) can traverse hundreds of kilometres and pass through several local authorities. Work done to maintain or upgrade a transmission line is only effective if it can be carried out on the whole length of the line. A partial upgrade is ineffective, because the capacity or reliability of the whole line would be limited by the section not maintained or upgraded.

2.3  Management of electricity transmission under the RMA

Unlike other network utilities, the majority of transmission lines are not covered by designations in district plans (see Appendix 3 for an explanation). Instead, Transpower relies on a complex system of rights and approvals under the RMA to operate, maintain and upgrade the national grid.

National, regional and district planning documents

The RMA sets the regulatory framework for resource management in New Zealand and provides for a range of policy instruments. The hierarchy of policy statements and plans under the RMA is set out in figure 2. National policy statements, including the New Zealand Coastal Policy Statement, set out objectives and policies for matters of national significance that are relevant to achieving the purposes of the RMA, but do not contain detailed rules. As noted above, a proposed NPS for electricity transmission was released for public consultation in May 2007 (see Appendix 1).

National environmental standards are regulations that are legally enforceable. They are used to manage the adverse effects of activities on the environment (eg, setting performance requirements for woodburners, requiring monitoring of water takes), or to set out minimum environmental quality standards (eg, standards for ambient air quality). NES are discussed in more detail in section 3.4.

Regional policy statements and plans contain objectives and policies (and regional plans also contain rules) that may relate to electricity transmission activities, for example land disturbance and activities in the coastal marine area. District plans may contain objectives, policies and rules that govern aspects of electricity transmission, or activities that may affect transmission lines, especially land-use activities, subdivision and noise.

Resource consents

A resource consent is an approval for an activity regulated under the RMA. Land-use consents and subdivision consents are granted by district councils. Coastal permits, water permits, discharge permits, and land-use consents for activities specified in a regional plan are obtained from the regional council.

Regional and district plan rules set out the requirements for resource consents. Transmission activities are permitted in some plans, whereas other plans require a range of resource consents for these activities. The proposals for NES would standardise this mixture. Some plans currently require consent for building and subdivision activities on the basis that they could affect transmission lines, but few plans control earthworks that may affect transmission infrastructure.

Designations

A designation in a district plan identifies an area of land for use for public works or projects, and may have conditions attached to it. Only ‘requiring authorities’ (network utility operators approved by the Minister for the Environment, local authorities and Ministers of the Crown) can arrange for a designation. A designation gives the requiring authority rights to undertake specified land-use activities in the designation corridor without obtaining resource consents. A designation also protects the designated land. A person who wishes to do anything on designated land that may prevent or hinder the designated work must get written consent from the requiring authority. Landowners affected by a designation can apply to the Environment Court for an order obliging the requiring authority to purchase or lease the land.

Transpower is required either to have a resource consent or to seek inclusion of a designation in a plan for any activity that is not a permitted activity or an existing use. Transpower has designations for substations, but does not have designations for the majority of the existing network.

Permitted activities and existing-use rights

Many district plans specify that the maintenance and upgrading of transmission lines is a permitted activity, and many plans permit new lines up to 110 kV in rural areas. Some plans recognise the national significance of the transmission network by permitting a wide range of transmission activities. Transpower often applies for ‘certificates of compliance’ for activities permitted by plans, in order to provide certainty about the status of the activity.

Section 10 of the RMA provides for land to be used in a manner that contravenes a rule in a district plan or proposed district plan if:

• the use was lawfully established before the rule became operative or the proposed plan was notified
• the effects of the use are the same or similar in character, intensity, and scale to those that existed before the rule became operative or the proposed plan was notified.

These ‘existing-use rights’ apply to the presence and operation of the existing transmission infrastructure, and any maintenance activities that do not change the character, intensity or scale of the transmission infrastructure.

2.4  Management of electricity transmission under the Electricity Act

Protection of transmission assets

The Electricity Act (1992) makes provision for regulations and codes of practice relating to electrical safety. The New Zealand Electricity Code of Practice (NZECP 34) is a mandatory code of practice under the Electricity Act (Ministry of Consumer Affairs, 2001). It sets out electrical safe distances for activities adjacent to transmission lines, such as excavation and structures, and safety requirements for working near lines. NZECP 34 applies to electricity transmission and distribution lines, and overhead telecommunications lines. It is enforced by the Energy Safety Service of the Ministry of Consumer Affairs, and violations can incur a fine of up to $10,000.

NZECP 34 requires that written approval be obtained from the line owner before undertaking work within specified safe distances of overhead lines. The line owner is also required to comply with these safe distances when constructing or modifying lines. The operation of NZECP 34 is discussed further in section 2.5.

The Electricity (Hazards from Trees) Regulations 2003 (the ‘Trees Regulations’) are mandatory requirements under the Electricity Act for managing trees adjacent to power lines. The Trees Regulations set out the distances from electrical conductors within which trees must not interfere, and specify who has responsibility for cutting or trimming interfering trees. Tree owners are responsible for any trees they own that are growing close to conductors. The ‘line maintenance contractor’ is responsible for the service of any notices under the Trees Regulations, so that trees that threaten the safe operation of the transmission line can be removed or trimmed. Tree owners can opt out and get the line owner to manage the trees on their behalf.

Access to land

The RMA, including an NES, cannot address issues of access. Nothing in the RMA can give a transmission line owner the right to enter private property. Transpower’s right of access to lines constructed (or started) before 1988 is provided by the Electricity Act. Section 23 of the Act allows Transpower, as the owner of existing transmission lines, the right to enter upon land for the purpose of gaining access to those works and may perform any act or operation necessary for the purpose of inspecting, maintaining or operating the works. In this section, ‘maintenance’ includes:

(a) any repairs and any other activities for the purpose of maintaining, or that have the effect of maintaining, existing works; and

(b) the carrying out of any replacement or upgrade of existing works as long as the land will not be injuriously affected as a result of the replacement or upgrade.

Before entering land to undertake maintenance, Transpower must give the landowner 10 working days’ notice and must state when the land will be entered, the timing of the work, and what work will be undertaken. If the proposed work will injuriously affect the land, or the line was constructed after 1988, Transpower needs to arrange access and compensation with the landowner.

2.5  Why is national direction appropriate?

Opportunities to provide national guidance and direction

The RMA delegates decision-making to a local level, and the government has not provided any guidance on balancing the national benefits and local costs of electricity transmission. Each local authority has different policies, objectives and rules that apply to transmission. The proposed NPS contains an objective and policies at a national level (which will be incorporated into plans), but does not contain specific provisions such as rules. There is therefore further opportunity to provide detailed national direction on the management of transmission activities through the development of specific NES.

Improving consistency in local plans and enhancing provision for transmission activities

We have already noted in general terms that local plans have a wide variety of approaches for managing electricity transmission. The same line upgrade could be permitted under one district plan, controlled in an adjacent district, and discretionary in the next district. A stocktake of district plans carried out in 2006 (Burtons, 2006) made the following specific findings:

• Plans are designed to be used by the general public rather than network utility companies, and each plan is structured in a way designed to be useful to users. A third of plans are straightforward for utility companies to interpret because they have a stand-alone utilities chapter setting out clear rules for electricity transmission. Two-thirds do not have a stand-alone utilities chapter and require referring to rules interspersed throughout the plan to determine consent requirements for transmission activities.
• Only a quarter of district plans provide for transmission activities that do not have significant adverse effects to be permitted activities.
• Half of district plans do not make provision for upgrading transmission lines which meet the operational needs of the line owner. For example, many plans impose the same consent requirements - usually full discretionary - on upgrading existing lines (beyond minor upgrading) as for new lines, even though the effects of a new line are much more significant than upgrading an existing line, or they impose restrictive 100 MVA capacity limits.

The complexity and variability of district plans results in:

• variability in the way the adverse effects of transmission activities are managed
• more costly RMA approvals (and these costs may be passed on to electricity consumers through higher charges, or to ratepayers)
• delays in projects, which result in higher costs and also increase the risk of grid outages
• costs to Transpower to make submissions on plans, and to appeal plan changes, in an effort to get consistent provisions for transmission into plans; local authorities bear the costs of responding to submissions and appeals.

By providing national guidance on electricity transmission under the RMA, there is an opportunity to both:

• give greater certainty to local communities that the environmental effects of transmission activities are being effectively managed, and
• enhance the robustness of the national grid through timely approvals and an appropriate level of control.

Enhancing protection of transmission infrastructure

Only a third of plans place controls on activities that may affect the integrity of the transmission network (eg, inappropriate subdivision, quarrying near pylons), so there is scope for improvement. At present, third-party activities that could affect the lines and put them at risk are controlled by a mandatory code of practice under the Electricity Act (see section 2.4). However, the electrical code of practice NZECP 34 has not provided the protection for transmission lines from activities of third parties that was anticipated, for the following reasons:

• Enforcement tends to be after the fact.
• The Electricity Act does not make provision for having structures in violation of the code removed or land reinstated.
• The code is primarily intended to prevent direct harm from electricity, so the distances in the code are considerably less than may be considered desirable for clarity and certainty. Also, the safe distances and requirements are difficult for the lay person to understand and require considerable interpretation (see section 3.2).
• The protection provided is a specified distance from the towers (at ground level) and a radial protection zone around the wires. If the wires are sufficiently distant from the ground, it is still possible to construct a building under the wires and conform with the code of practice. Under-building makes line access and maintenance difficult, and increases the chances of further encroachment into unsafe areas.
• There are frequent violations of the electrical code of practice: Transpower records show an estimated 5,000 breaches of the code per year.

2.6  Problem statement

As outlined above, there are two key problems:

• inconsistency of the provisions in local plans that apply to electricity transmission operation, maintenance and upgrade
• lack of adequate provision for protecting electricity transmission.

These problems apply mainly to existing transmission lines. For new transmission lines, Transpower will seek designations in district plans (or in some cases resource consents) and will have some control over activities undertaken by third parties through easement agreements with landowners.

2.7  Objective for the sustainable management of the national grid

The objective is to promote the sustainable management of electricity transmission (the national grid), ensuring there is national consistency and adequate protection of the grid.

The objective for national guidance on electricity transmission contributes to achieving the purpose of the RMA, which is “to promote the sustainable management of natural and physical resources” (including structures). Sustainable management means managing the use, development and protection of natural and physical resources in a way, or at a rate, that enables people and communities to provide for their social, economic and cultural wellbeing and for their health and safety, while:

• sustaining the potential of natural and physical resources (excluding minerals) to meet the reasonably foreseeable needs of future generations
• safeguarding the life-supporting capacity of air, water, soil and ecosystems
• avoiding, remedying or mitigating any adverse effects of activities on the environment.

2.8  Conclusions

There is an opportunity for more effective management of the effects of electricity transmission activities on the environment, as well as the effects of activities adjacent to the transmission lines on electricity transmission infrastructure. Improving the consistency and certainty of consent requirements for transmission activities would help local authorities, and Transpower as operator of the national grid. The current management framework results in costs that could be avoided, and does not support the purpose of the RMA by promoting the sustainable management of the national grid. It does not support the government’s energy policy objectives, particularly relating to increasing the renewable electricity supply.

The current system exposes the national grid to risk from inappropriate activities affecting the grid, or from delays to maintenance or upgrade projects while approvals are obtained. This increases the risks of electricity outages (supply interruptions), with attendant negative impacts on the economy and on people’s wellbeing. It also imposes heavy costs on Transpower in terms of fixing problems caused by third-party activities.

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