You are here: Resource Management Act Call-in of Transpower's North Island Grid Upgrade Project Board of Inquiry Upper North Island Grid Upgrade Proposal

Decision on adjournment requests

Introduction

The National Grid includes a connection between Whakamaru and Auckland. Transpower New Zealand Limited (Transpower), which is responsible for the Grid, considers that this part of the Grid now needs to be upgraded to ensure the continued security and certainty of electricity supply.
Under the Electricity Act 1992, the Electricity Commission issued a draft decision declining its approval of an initial upgrade proposal; and on 5 July 2007 it approved an amended proposal for a staged upgrade of that part of the Grid.
Transpower sought the necessary authorisations under the Resource Management Act 1991 (the RMA) for the amended proposal. On 28 May 2007 it gave notices of its requirements for the necessary designations, and subsequently it applied for the necessary resource consents.
On 8 August 2007, Minister Hodgson acted under section 141B of the RMA and called in those requirements and applications. Under section 146 of the RMA, the Minister appointed a board of inquiry to hear the submissions, and make decisions on the requirements and resource-consent applications.
By public notice given on 8 September 2007, the Minister called for submissions on the upgrade proposal, to be lodged by 5 October 2007. In the event some 1,244 submissions were lodged, most being in opposition to the upgrade proposal, or to various aspects of it. 899 submitters indicated that they wanted to be heard in support of their submissions.
On 3 December 2007 the Board of Inquirygave notice that it expected to commence the inquiry hearing on 25 March 2008; and set times for pre-hearing events. In particular it required that statements of evidence to be given on behalf of Transpower were to be lodged with the Board by 1 February 2008, and to be made publicly available on 5 February; that statements of evidence on behalf of submitters were to be lodged with the Board by 26 February, and made public on 28 February; and that statements of rebuttal evidence on behalf of Transpower were to be lodged by 13 March, and made public on 17 March.
In accordance with the Board’s directions, on 1 February 2008 Transpower lodged statements of evidence to be given on its behalf, and on 5 February they were published on the Board’s website.
On 8 February 2008, counsel on behalf of Robert McQueen (one of the submitters) sent a memorandum to the Board by which they informed the Board that on 19 December 2007 New Era Energy Incorporated had filed in the High Court judicial review proceedings challenging the lawfulness of the Electricity Commission’s decision on 5 July 2007 approving Transpower’s amended upgrade proposal. Counsel asked that the Board adjourn the hearing of submissions on the requirements and resource consent applications under RMA until after the outcome of the judicial review proceedings is known.
The Board invited anyone who would be taking part in the hearing to inform it in writing by 22 February of their attitude to the postponement request, and their reasons.
The Board has received advice from 132 submitters that they support Mr McQueen’s postponement request. 7 submitters have advised that they oppose it.
Some submitters have also asked for an extension of the time for them to lodge with the Board statements of their evidence.
The Board addresses first Mr McQueen’s request and the reasons for and against it; and then addresses the requests for extending the time for lodging evidence statements.

Postponement pending outcome of review of Commission approval

Several grounds were raised in support of, and opposition to, Mr McQueen’s request that the Board’s inquiry hearing be postponed until the outcome is known of New Era Energy’s proceedings for review of the Electricity Commission’s approval.

Commission approval critical

Mr McQueen contended that the Electricity Commission’s approval of the proposal proceeding to the consenting stage is critical to the overall transmission planning process, and that the transmission line proposal cannot proceed without that approval. Submitters supporting the postponement request adopted that contention. The Manukau City Council contended that the decision of the Electricity Commission forms a crucial basis for Transpower’s case before the Board, and that the Board of Inquiry cannot assume the validity of that decision.
Transpower responded that the Electricity Commission’s approval is not a pre-requisite for its resource-consent applications and requirements for designations. It submitted that the Electricity Commission process and the RMA process are distinct, and fulfil different purposes; and that there is no legal requirement preventing it from implementing resource consents and designations without Electricity Commission approval. Transpower added that the Electricity Commission decision retains its validity unless and until it is set aside; and that Mr McQueen may not assume a favourable outcome of the judicial review proceedings.
Submitters opposing the postponement presented similar arguments.
The Board regrets that counsel for those taking part on the postponement proposal did not provide the Board with the source of the legal basis for the Electricity Commission decision, and in particular did not provide an authoritative text of Section III of Part F of the Electricity Governance Rules 2003 under which it was made.
Having located what it understands to be the text of that instrument made under the Electricity Act 1992, and having reviewed it in its context, the Board finds:
1. That the purpose of the Electricity Commission’s consideration and approval of the proposal under those Rules is materially different from the purpose of the Board’s consideration and decisions on the resource-consent applications and designation requirements under the RMA.
2. To the extent that the Electricity Commission’s approval is essential for Transpower’s intended funding of the proposal, that is not relevant to the decisions the Board has to make.¹
3. That the contention that the grid upgrade cannot proceed without the Electricity Commission’s approval is not correct in law.
4. That in law the Electricity Commission’s decision is to be treated as valid unless and until it is invalidated by a Court of competent jurisdiction;² and the Board of Inquiry should not presume that New Era Energy’s judicial review proceedings will result in the Commission’s decision being invalidated.
5. That the existence of New Era Energy’s judicial proceedings does not justify the Board postponing the carrying out of its duty to conduct an inquiry hearing into Transpower’s resource-consent applications and designation requirements.

Forestalling consideration of alternatives

Mr McQueen contended that if the Board proceeds with its hearing in the absence of a decision on the judicial review proceedings, that would forestall any opportunity for the Board to look at alternatives to the Transpower proposal as required by section 168A(3) of the RMA, because the Board may have already decided to confirm the requirement forming part of Transpower’s proposal.
The Manukau City Council stated that consideration of alternatives is fundamental to its case, and contended that the scope of the alternatives considered by the Electricity Commission was insufficient to satisfy the requirements of the RMA. It also contended that the evidence to be presented by Transpower would not provide an adequate evidential basis for the Board to come to a decision on that question. The Waipa District Council made a similar submission.
Transpower responded that section 168A(3) (relied on by Mr McQueen) is not applicable; that section 171(1)(b) requires the Board to have regard to whether Transpower had given adequate consideration to alternative sites, routes or methods; and that the adequacy of that consideration will not change depending on the outcome of Mr McQueen’s judicial review proceedings. Transpower contended that the commencement of the judicial review proceedings does not, as a matter of fact or law, forestall the Board’s ability to assess Transpower’s consideration of alternatives.
The Board accepts that, whether section 168A or section 171 is applicable, it may have to consider the effects on the environment of allowing the requirements having particular regard (among other things) to whether adequate consideration has been given to alternative sites, routes or methods of undertaking the work.
However the Board does not understand how the existence of pending proceedings to review the Electricity Commission approval would forestall the Board’s performance of those duties. The Board accepts Transpower’s point that the consideration of alternatives is about past facts, about which the Board will need to make judgements of degree on their adequacy.
The Board expects to have to make its own findings on the evidence before it. It does not accept that the Electricity Commission’s performance of its functions under other legislation relieve the Board of its own duties under the RMA.
The Board infers that some submitters may expect that in deciding on the postponement, the Board will read evidence statements lodged by Transpower, and consider whether or not they show that adequate consideration has been given to alternatives. The Board considers that it would be premature for it to do so. Rather, the Board will await the giving of evidence by Transpower and all submitters at the public hearing, any cross-examination and re-examination, and the presentation of submissions about the evidence, before making any necessary finding on the adequacy of Transpower’s consideration of alternatives.
In summary, the Board does not accept that there is any sound basis for postponing the inquiry hearing on the ground that the judicial review proceedings might constrain the Board in having particular regard to whether adequate consideration has been given to alternatives.

Precedents

Mr McQueen’s counsel cited certain past proceedings in the Planning Tribunal and the Environment Court as precedents in support of the postponement request. Those cases are not authorities binding on the Board. At best, they illustrate how the Tribunal and Court dealt with adjourning proceedings in the circumstances then existing.
In the cases cited by counsel, the proposals could not lawfully be implemented without consents by Ministers of the Crown. However, Transpower’s grid upgrade proposal is not at law subject to such a condition.
The Board accepts that a body that is to act in a judicial manner should preserve its independence of the Executive. The Board also accepts counsel’s submission that the Electricity Commission is a Crown entity. However the Commission is not a Minister of the Crown. It is a creature of statute,³ so it is not a proxy for the Executive.
The Board accepts that in principle, if the cost to participants in preparing and presenting their cases could potentially be wasted, such waste should be avoided if practicable. That may be relevant to our consideration of prejudice to submitters.

Prejudice to submitters

Mr McQueen submitted that postponing the inquiry hearing pending the outcome of the judicial review proceedings would avoid unnecessary time being spent by all parties, including Transpower and the Board, in preparation for and attendance at the Board hearing, time that would be wasted should the High Court overturn the Electricity Commission’s 2007 decision. Similar representations were made by other submitters.
Another submitter (the Ministry of Economic Development) disputed that time engaged in the Board’s inquiry would be wasted if the High Court quashes the Electricity Commission’s decision. The Ministry remarked that even in that event, Transpower could still seek resource consents and designations, and only implement them once later fresh approval of the Commission has been obtained.
Another submitter (Meridian Energy Limited) contended that uncertainty about the proposal benefits no party, and reminded the Board that the notices of requirement have interim effects.
Authorisations under the RMA for proposed activities are permissive. A person to whom resource consent is granted is not obliged to implement the project, and may decide not to do so —whether for lack of funding, or other reason.
So even if the Electricity Commission’s decision is invalidated by the High Court, the time engaged in the Board’s inquiry would not have been wasted, any more than would time taken in any RMA process in which activities are authorised, but in the end are not implemented.

Delay

Transpower submitted that there had been material delays by Mr McQueen in bringing the judicial review proceedings, and in the time taken to apply for adjournment of the Board’s inquiry.
It is not evident that the Board of Inquiry needs or is able to form an opinion on whether the time taken by New Era Energy in commencing its judicial review proceedings involved undue delay.
However the Board accepts Transpower’s submission that the application for postponement of the Board’s inquiry relying on the judicial review proceedings should have been made as soon as the Board was constituted and the judicial review proceedings were being considered. Mr McQueen has not explained why he left making the application until 8 February 2008, well after the fixture for the inquiry had been made, the pre-hearing timetable published, and other participants in the inquiry had made commitments in reliance on it.
That delay has added to the prejudice to Transpower and other submitters that would result from the postponement that Mr McQueen seeks, which we consider in the next section.

Prejudice to Transpower and others

Transpower submitted that it would be unduly prejudiced by the delay to the grid upgrade that would result from the adjournment of the inquiry sought by Mr McQueen. Transpower informed the Board that New Era Energy’s judicial review proceedings had been allocated a hearing in the High Court on 18 August 2008 for five days, and estimated that a decision may not be likely until October or November 2008.
Transpower lodged an affidavit by Mr JNO Coad, its Acting Grid Programme Manager. In his affidavit, Mr Coad gave evidence that the transmission lines and underground cables have to be commissioned in 2013 to meet the projected system needs of reliably and securely delivering electricity to Auckland and Northland. To meet that, construction would need to commence in April 2009. Mr Coad explained that the proposed adjournment could result in a delay of at least, and potentially more than, 6 months, imperilling commissioning in 2013.
Transpower also submitted that it had committed significant resources and engaged overseas experts in reliance on the Board’s directions.
The Ministry of Economic Development submitted that the adjournment would prejudice electricity consumers and the New Zealand economy. It observed that the grid upgrade is time-critical, the project is large and complex. It contended that any delay has the potential to elevate the risks to security of supply in the upper North Island, a region comprising a very significant proportion of the country’s total economic activity. Similar points were made by Meridian Energy Limited and by Genesis Energy.
The Board accepts that an outcome of New Era Energy’s review proceedings would not be known until the end of 2008. In practice it is quite unlikely that the Board’s inquiry could then be commenced before the second quarter of 2009 at the earliest. So the adjournment would effectively delay the Board’s decision by about a year or more.
The Board accepts that Transpower was entitled to rely on the date for starting the inquiry and the pre-hearing timetable published on 3 December 2007, and that it would be prejudiced by postponement of the inquiry, in disruption to commitments made for the conduct of its case in reliance on those dates.
The Board also accepts that if, following a postponed inquiry, the Board upholds the requirements and grants the resource consents sought, the grid upgrade would have been delayed by about a year. On the evidence of Mr Coad, that would jeopardise the attainment of reliable and secure delivery of electricity in 2013. If the Board then declines the authorisations for the grid upgrade, the time left for Transpower to pursue alternative measures would similarly be curtailed.
The Board also accepts Meridian Energy’s point that the interim constraints created by the requirements would also been extended by that period.

Conclusion on postponement

The Board has made these findings:
1. The existence of New Era Energy’s judicial review proceedings does not justify postponing the Board’s inquiry.
2. The judicial review proceedings would not forestall the Board’s performance of any duties to have (particular) regard to whether Transpower has given adequate consideration to alternative sites, routes and methods of undertaking the work.
3. The precedents cited on behalf of Mr McQueen are not persuasive in support of the postponement.
4. The lateness of the application for the adjournment has not been explained.
5. Holding to the published start of the inquiry would not prejudice the submitters; but postponing the inquiry would prejudice Transpower, and would potentially prejudice electricity consumers in the upper North Island, and the public generally.
So the Board considers that postponing the inquiry hearing until the outcome is known of New Era Energy’s judicial review proceedings is not justified. Mr McQueen’s request is declined.

Extension of time for submitter’s evidence

Now we address the requests by some submitters for extension of the time for lodging statements of their evidence. We summarise the reasons given for those requests:
1. Transpower lodged 49 pieces of evidence; some are sizeable; they were available on the Board website only 13 working days before submitters’ evidence was to be lodged; and there was not enough time to review it and prepare evidence in reply. Several submitters made representations to that general effect.
2. One submitter group claimed to have asked for an extension by letter to the Board dated 18 December 2007. It also advised that a landscape architect it approached had been engaged by a number of organisations and groups and may be unable to prepare in time a statement of the depth and quality that he wished; and that engineering consultants approached had not been willing or able to consider the issues raised in time.
3. Another submitter (Manukau City Council) proposed a revised timetable by which submitters would have until 14 March (instead of 26 February) to lodge their evidence; and Transpower rebuttal evidence be lodged by 21 March (instead of 13 March); and made publicly available on 24 March (a public holiday). That revision was supported by Auckland Regional Council.
Transpower responded that it had made efforts to ensure that it had complied with the timetable, and had made necessary preparations for rebuttal evidence as directed. It submitted that there had been ample time for submitters to engage expert witnesses and formulate their cases, observing that the notices of requirement and the documents in a common bundle of exhibits had been in the public arena for almost a year. It contended that there had been sufficient time for submitters to make necessary arrangements to enable them to comply with the evidence timetable.
Transpower’s designation requirements and resource-consent applications have been publicly available since at least September 2007. Since at least 5 October 2007 (by when submissions were to be lodged) submitters have been able to engage expert witnesses, and prepare statements of their affirmative evidence. None of those seeking extensions of time have shown that they made timely starts to engagement and preparation of their affirmative evidence. Any basis for extending the time for lodging submitter’s evidence can only be based on time taken to prepare evidence in answer to Transpower’s, not the preparation of the submitter’s affirmative evidence.
The letter on behalf of one submitter group dated 18 December 2007 proves on examination to have been addressed to the Minister for the Environment, not to the Board of Inquiry.
The Board accepts that Transpower has planned and managed its preparation for the inquiry hearing in reliance on the timetable directions issued by the Board, and that it would be prejudiced by extending the time for submitters to lodge statements of their evidence. Many submitters have lodged statements of evidence in conformity with the Board’s timetable.
Although not persuaded that the submitters have made sound cases for an extension of time, as a matter of leniency the Board allows submitters further time in which to lodge statements of their evidence; or if they have already done so, fuller statements of evidence in place of those already lodged. This needs to be done promptly, to avoid imperilling the start of the inquiry hearing on 25 March. Transpower may need consequential leniency for lodging statements of rebuttal evidence.
So the Board amends the prehearing timetable in these respects:
1. Up to (but no later than) 14 March 2008, any submitter may lodge with the Board statements of evidence to be given, or revisions of statements of evidence already lodged. These will be placed on the Board’s web-pages as soon as practicable.
2. Transpower may lodge with the Board statements of rebuttal evidence up to 5 working days prior to the giving of the rebuttal evidence. These will be placed on the Board’s web-pages as soon as practicable after being received by the Board.
To avoid doubt, the Board confirms that the inquiry hearing is to start on 25 March 2008. Formal notice to that effect is to be given on 6 March 2008.

For the Board:

David F G Sheppard,
Chairperson
3 March 2008.

¹ Cf Beadle v Minister of Corrections Environment Court Decision A074/2002 [174].

² See Love v Porirua City Council [1984] 2 NZLR 308, 311 CA.

³ Electricity Act 1992, s 172M.