Proposed National Environmental Standards for Electricity Transmission Activities

• Executive Summary
• Introduction
• The Status Quo
• Options
• Proposed National Environmental Standards for Electricity Transmission Activities
• Efficiency and Effectiveness of the Transmission Activities NES
• Summary
• Appendix 1
• Appendix 2
• References

Proposed National Environmental Standards for Electricity Transmission Activities
Evaluation under section 32 and section 44 of the Resource Management Act 1991

Executive Summary

The New Zealand national electricity grid is owned and managed by Transpower. The majority of the grid was constructed before the Resource Management Act 1991 (the RMA) came into force and therefore has rights under the RMA to continue as an existing use. However, these rights do not apply to upgrading transmission lines. Transpower obtains resource consents for upgrading and some maintenance activities, as required by rules in district and regional plans.

This creates a number of problems, including the costs of processing resource consents, delays and uncertainty caused by the lack of consistency in plan rules (consent requirements for transmission activities vary significantly between district plans), and often a lack of specific provisions for transmission activities.

The Ministry for the Environment is addressing these problems by providing greater central government leadership and direction. The National Policy Statement on Electricity Transmission (the NPS), which took effect in April 2008, addresses the variable recognition of the national benefits of electricity transmission in plans and council decision-making. To give effect to policies and objectives set out in the NPS, councils must notify and process a plan change or review by April 2012.

The National Environmental Standards for Transmission Activities (NES) would help councils to implement the NPS within specified timeframes by providing a set of nationally consistent rules. The rules would take immediate effect without going through the plan change process, and would reduce RMA costs associated with transmission activities. The rules would also significantly reduce Transpower’s plan advocacy costs and the costs of RMA approvals. The net benefits over 10 years are estimated to be between $4.8 and $5.5 million (net present value), and the benefit−cost ratio at between 5.6 and 6.0.

The benefits of the NES derive from lower RMA costs associated with transmission activities. The reasons for the reduction in costs and the way the NES satisfies the selection criteria are set out below. The NES would:

• minimise the cost and timeframe for implementing the NPS by:
  • providing a set of rules, to take immediate effect without going through the plan change process, which would reduce council expenditure in formulating new transmission activities rules, assessing and hearing submissions on these rules and dealing with appeals
  • reducing Transpower’s expenditure for making submissions on plan changes
• provide a nationally consistent framework of consent requirements for transmission activities
• provide for the effective operation, maintenance and upgrading of the network by making a range of transmission activities permitted
• take account of the operational requirements and technical constraints in determining the level of control on transmission activities
• manage the environmental effects of transmission by setting terms and conditions on permitted activities
• minimise RMA processing costs and delays
• be effective within the timeframes specified in the NPS
• provide an intangible benefit to the community from greater certainty about which activities are permitted and which require consent, although this is likely to be balanced by community costs (see below).

The costs identified for the NES occur within the first three years, as follows.

• Councils will incur implementation costs from the need to become familiar with the NES provisions, and through a small additional cost of notifying a plan change that includes the NES.
• Transpower will incur implementation costs from helping councils to understand transmission activities (this will be a small cost in addition to the cost of assisting councils as part of the NPS implementation).
• Government will incur costs from providing guidance on the NES and assisting councils with implementation.
• Councils and the community will incur intangible costs through finding out about the new requirements (first two to three years) and through loss of local control (ongoing).

Under the status quo, the community, councils and other agencies will incur costs, starting in 2008 and increasing through 2012, from becoming familiar with and implementing the NPS. The status quo is not simply a projection of historical costs: it is a projection of the new costs associated with the NPS.

The cost−benefit analysis also demonstrated that the financial output is sensitive to the percentage of councils wanting to incorporate the regulations into plans through a public consultation process, and to the level of Transpower’s activity. Transpower has recently announced a $50 million upgrade programme to maintain and strengthen structures on the national grid.¹ The programme will bring forward required maintenance work that had been planned over the next 10 years. Therefore, benefits from providing national consistency and regulatory certainty by the transmission activities NES may be underestimated in the cost−benefit analysis.

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