Electricity (Continuance of Supply) Amendment Bill

Electricity (Continuance of Supply) Amendment Bill The Parliament of New Zealand enacts as follows: 1 Title This Act is the Electricity (Continuance of Supply) Amendment Act 2008 . 2 Commencement This Act comes into force on the date that is 6 months after the date on which it receives the Royal assent. 3 Principal Act amended This Act amends the Electricity Act 1992. 4 New sections 62 to 62B substituted Section 62 is repealed and the following sections are substituted: 62 Continuance of supply obligation 1 The purpose of this section is to ensure that line function services continue to be supplied to old points of supply unless or until electricity is supplied to them by alternative means. 2 In this section and sections 62A and 62B , unless the context otherwise requires,— old point of supply — a means a point of supply to which line function services were being supplied on 1 April 1993 by a person or body who was required, immediately before that date, to be licensed under section 20 of the Electricity Act 1968; and b includes a point of supply that has at any time since 1 April 1993 replaced a point of supply referred to in paragraph (a) and to which line function services are being supplied supplying line function services includes operating works used to supply line function services. 3 A person who supplies line function services to an old point of supply on the date this subsection comes into force, or who was required to do so immediately before that date, must either— a continue to supply line function services to that old point of supply; or b supply electricity to that old point of supply by alternative means, after going through the process in section 62B . 4 A person stops being obliged under subsection (3) to supply line function services or electricity if— a the Minister, or every consumer who would be affected by the cessation of supply, consents to the cessation of supply; or b the obligation is assigned to, or assumed by, any person who is the successor in business to that person, in which case that successor becomes subject to the obligation instead. 5 The obligation to supply in subsection (3) does not apply if— a the supplier is entitled to cease supply because the consumer has failed to pay any money due on account for— i the supply of services by the supplier; or ii the supply of electricity by a different supplier; or b the supply needs to cease for reasons of safety or in order to carry out maintenance or upgrading work; or c the supply ceases as a result of circumstances beyond the control of the supplier (such as fire, earthquake, or inevitable accident). 6 If the supply of line function services or electricity ceases for any of the reasons in subsection (5) , the cessation may continue only for as long as the reason for cessation continues. 7 The obligation in subsection (3) is subject to anything to the contrary in this Act, or in any regulations made under section 169, or in any written agreement (whether made before or after 1 April 1993) between the supplier and a consumer who is or would, but for the agreement, be affected by the obligation. 8 Unless subsections (5) or (7) apply, every person who is subject to the obligation in subsection (3) commits an offence and is liable on summary conviction to a fine not exceeding $10,000, and to a further fine not exceeding $1,000 for every day or part of a day during which the offence continues, who, in contravention of subsection (3) ,— a knowingly ceases to supply line function services or electricity (as the case may be) to an old point of supply; or b having been made aware that supply to an old point of supply has ceased, fails to resume supply as soon as is reasonable in the circumstances. 62A How certain enactments apply to persons subject to obligation in section 62(3) 1 Any person who supplies either or both of line function services or electricity to an old point of supply under section 62(3) must be treated as if the person supplied those line function services or that electricity (as the case may be) to another person for the purpose of the definitions of electricity distributor and electricity retailer in section 2(1), and— a all of the obligations in this Act and any regulations made under it that apply to electricity distributors apply to any person who supplies line function services accordingly; and b all of the obligations in this Act and any regulations made under it (other than regulations made under section 172B (which are about low fixed charge tariff options)) that apply to electricity retailers apply to any person who supplies electricity accordingly. 2 A supplier who fulfils (or proposes to fulfil) the obligation in section 62(3) by supplying electricity by alternative means does not breach any of the provisions of the Electricity Industry Reform Act 1998 by supplying both line function services and electricity to the same point of supply, as long as the dual supply covers only the period of a trial or transition, and is temporary in nature. 62B Proposals to supply electricity by alternative means 1 A supplier who proposes to fulfil the obligation in section 62(3) by supplying electricity to an old point of supply by alternative means must first give notice of the proposal to each affected consumer and to the public. 2 The notice to each affected consumer must— a outline the proposal; and b describe how, under the proposal, the consumer's reasonable electricity needs will be met; and c give the consumer a reasonable period in which to comment on the proposal. 3 The notice to the public must be by way of a notice published at least 6 months before the proposal takes effect— a in a newspaper that is published at least weekly and that circulates in the district to which the proposal relates; and b that outlines the proposal and specifies the time within which any person may comment on the proposal. 4 The supplier must have regard to any comments received in response to the proposal. 5 Electricity governance regulations Section 172D(1) is amended by inserting the following paragraph after paragraph (9): 9A requiring any person who fulfils the obligation in section 62(3) by providing electricity by alternative means to use a specified pricing methodology in setting the price for electricity supplied by alternative means: . 3 Principal Act amended This Part amends the Electricity Act 1992. 4 New sections 62 to 62B substituted Section 62 is repealed and the following sections are substituted: 62 Continuance of supply obligation 1 This section applies to an electricity distributor who, in relation to any place,— a immediately before this section (as inserted by the Electricity (Continuance of Supply) Amendment Act 2009 ) comes into force, is prohibited from ceasing to supply line function services to the place without the prior consent of either the Minister or every consumer who would be affected by the cessation of those services; or b is the successor in business to an electricity distributor referred to in paragraph (a) . 2 An electricity distributor to whom this section applies must, in relation to the place referred to in subsection (1) , either— a supply line function services to the place so that the place is within the distributor's local network; or b supply the place with electricity from an alternative source. 3 An electricity distributor's obligation under subsection (2) comes to an end with respect to a place if— a the landowner and (if the landowner is not the consumer) the consumer, or the Minister, agree in writing to the obligation coming to an end; or b the obligation is assigned to, or assumed by, a successor in business to the distributor. 4 The obligation in subsection (2) is subject to anything to the contrary in this Act, any regulations made under section 169, or any written agreement between the distributor and a landowner who is, or would be but for the agreement, affected by the obligation. 5 The obligation in subsection (2) is suspended in any of the following circumstances: a the supply of line function services or electricity from an alternative source has ceased as a result of circumstances beyond the control of the distributor (such as fire, earthquake, or inevitable accident): b the supply of line function services or electricity from an alternative source needs to cease for reasons of safety or in order to carry out maintenance or upgrading work: c the electricity distributor, or an electricity retailer, is entitled to cease supply (whether of line function services or electricity) because the consumer has failed to pay money due on account to the distributor or retailer. 6 If the supply of line function services or electricity from an alternative source ceases in any of the circumstances in subsection (5) , the cessation may continue only for as long as the reason for cessation continues. 7 An electricity distributor who is obliged under subsection (2) to supply line function services or electricity from an alternative source to a place commits an offence, and is liable on summary conviction to a fine not exceeding $10,000 and to a further fine not exceeding $1,000 for every day or part of a day during which the offence continues, if the distributor,— a having been made aware that supply to the place has ceased in the circumstance described in subsection (5)⁠(a) , fails to resume supply as soon as is reasonable in the circumstances; or b knowingly ceases to supply line function services or electricity (as the case may be) to the place, other than in circumstances described in subsection (5)⁠(b) or (c) . 8 In this section and sections 62A and 62B ,— landowner , in relation to a place, means a person who owns the lines or electrical installations at the place, being lines or electrical installations to which an electricity distributor's lines are connected local network has the same meaning as in section 3(1) of the Electricity Industry Reform Act 1998 supplying electricity from an alternative source means supplying a place with electricity from a source other than an electricity distributor's local network, and includes, if necessary, supplying the associated line function services to deliver that electricity. 62A Application of certain enactments to electricity distributors subject to obligation in section 62(2) 1 The obligations in this Act and any regulations made under it (other than regulations referred to in subsection (2) ) that apply to electricity retailers apply to an electricity distributor in connection with any supply by the distributor of electricity from an alternative source, if that supply is in fulfilment of the obligation in section 62(2) . 2 Regulations made under section 172B (which are about low fixed charge tariff options) do not apply to an electricity distributor who supplies electricity from an alternative source. 3 If an electricity distributor, during a trial or transition in the course of complying with section 62(2) , both supplies a place with line function services that connect the place to a local network and, at the same time, supplies the place with electricity from an alternative source, the distributor is not to be treated as thereby being involved in generation for the purposes of the Electricity Industry Reform Act 1998. 62B Proposal to supply electricity from alternative source 1 An electricity distributor to whom section 62 applies, and who proposes to comply with section 62(2) by supplying a place with electricity from an alternative source, must give at least 6 months' notice of the proposal to— a every consumer affected by the proposal; and b if the landowner is not the consumer, the landowner; and c every electricity retailer who supplies electricity to the place; and d the public in the district in which the place is situated. 2 The notice to each affected consumer and any landowner must— a outline the proposal; and b describe how, under the proposal, the consumer's reasonable electricity needs will be met; and c give the consumer and any landowner a reasonable period in which to comment on the proposal. 3 If the distributor is unable to locate a landowner of a place after taking reasonable steps to do so, the distributor is not required to give notice to the landowner under subsection (1) . 4 The notice to the public must be by way of a notice— a published in a newspaper that is published at least weekly and that circulates in the district to which the proposal relates; and b that outlines the proposal and specifies the time within which any person may comment on it. 5 The supplier must have regard to any comments received in response to the proposal. 5 Electricity governance regulations Section 172D(1) is amended by inserting the following paragraph after paragraph (9): 9A requiring an electricity distributor who complies with the obligation in section 62(2) by supplying electricity from an alternative source to use a specified pricing methodology in setting the price for that electricity: . 6 Principal Act amended This Part amends the Commerce Act 1986. 7 Meaning of electricity lines services Section 54C is amended by inserting the following subsection after subsection (2): 2A However, despite anything in subsection (2), the supply of electricity from an alternative source in order to comply with section 62(2) of the Electricity Act 1992 is to be treated as a supply of electricity lines services.