Submission to the Productivity Commission by Transpower New Zealand Limited on the draft report “Using Land for Housing” 4 August 2015 Address for service: Transpower New Zealand Ltd PO Box 1021 Wellington 6140 Attention: Jo Mooar, Team Leader, Environment Policy and Planning Email: [email protected] Telephone: 04 590 6060 1. Transpower welcomes the opportunity to comment on the Productivity Commission draft report “Using Land for Housing” (the Draft Report). 2. Transpower has extensive experience with plan changes throughout New Zealand, including implementing national policy statements and national environmental standards. Transpower officials would be pleased to meet with the Inquiry Director or other Commission representatives to discuss Transpower’s submission or plan change issues more generally. Transpower – who we are and how we are regulated 3. Transpower New Zealand Limited (Transpower) is the State Owned Enterprise that plans, builds, maintains, owns and operates New Zealand’s high voltage transmission network (the National Grid). 4. Transpower’s shareholding Ministers are the Minister of Finance and the Minister for State- Owned Enterprises. Transpower is required to deliver a reliable and secure electricity supply and operate as a successful business. 5. The National Grid is a natural monopoly, and Transpower's transmission activities are regulated by the Commerce Commission under the Commerce Act 1986. This regulation includes controlling investment in the Grid, and the returns on that investment. 6. Transpower is also regulated by the Electricity Authority which determines how transmission revenue is recovered from transmission users. The cost of transmission investments are recovered directly from electricity consumers. Transpower’s Assets 7. The National Grid extends from Kaikohe in the North Island to Tiwai Point in the South Island (see maps attached as Appendix A). It is the physical infrastructure which transports electricity from where it is generated to the distribution companies which supply electricity to homes and businesses throughout New Zealand (see Appendix B for a diagram of the electricity industry makeup). 8. Electricity underpins economic growth and supports the economic, social and cultural aspirations of all New Zealanders. Electricity contributes actively to the lives of people in New Zealand every day. 9. The National Grid comprises around 12,000 km of high voltage transmission lines and 40,000 towers and poles connecting 167 substations and switching stations across the country. 10. The Grid comprises a high voltage backbone which runs the length of the country and links major generation (such as the geothermal power stations near Taupo and the hydro power stations in the South Island) to major loads in cities. The bulk of the Grid backbone was built 2 around 60 years ago and comprises most of the 220 kV lines throughout New Zealand, along with the High Voltage Direct Current inter-island link between the North and South Islands. 11. Connected to this Grid backbone are regional Grid lines (also owned or operated by Transpower) which connect smaller generation stations and supply regional communities. 12. The National Grid is an interconnected and linear network and an essential part of New Zealand’s electricity system. It provides bulk electricity into substations where the electricity is then converted into lower voltages so it can be used by distribution companies. 13. Without National Grid overhead transmission lines, cables, substations and associated infrastructure, electricity that is generated at power stations cannot reach distribution companies and therefore cannot power New Zealand’s homes, businesses, schools communities and major industrial users. The National Grid literally keeps the country’s lights on. 14. The Grid must be sustainably managed so it can endure and continue to supply a reliable, secure supply of electricity for all New Zealanders. As the country’s dependence on electricity continues, the ability to maintain and upgrade the Grid becomes increasingly important in order to ensure a secure and reliable power supply for the country. Potential adverse impacts of poorly planned development on the National Grid 15. The National Grid has developed over time. Most transmission lines were originally built in rural areas over open land. The majority of the assets in Auckland, for example, were established and commissioned between 1927 and 1969. The majority of overhead lines are not designated, nor do they have easements. They were lawfully established at the time under the relevant Public Works Act and Electricity Act legislation. Transpower relies on “deemed easements” under the Electricity Act 1992 to access, inspect and maintain the lines. 16. Over time, city boundaries have expanded and development has occurred under, and in close proximity to the lines, including structures, houses and other buildings without Transpower’s consent. 17. Transmission assets are long-life assets and can effectively operate virtually indefinitely provided they can be properly maintained, and upgraded and developed as required. 18. Transpower has a continuous programme of work to maintain and enhance its assets all across the country. The ability to access the National Grid in order to carry out these works is essential, and must be maintained into the future. 19. Transpower does not typically own the land on which transmission lines are located, and instead relies on provisions of the Electricity Act 1992 to access and inspect lines. Under that Act, Transpower has little direct control over activities underneath or next to lines that may otherwise affect access, safety or operational activities. 20. The National Grid is critical electricity infrastructure but is not ‘servicing infrastructure’ in the sense that term is used in the Draft Report. The National Grid does not provide power directly to homes, businesses and communities (although it does have some major direct connect 3 customers such as KiwRail and the Marsden Oil Refinery). National Grid infrastructure is not required to be in place before land can be released for development. Houses near National Grid transmission lines and substations 21. Transpower acknowledges the importance of unlocking land for housing and easing development constraints. However, local authority and central government regulatory initiatives should be aware of the potential for housing to constrain the National Grid. 22. Houses located near transmission lines and substations can create safety risks to both landowners and Transpower workers, and result in reverse sensitivity impacts (which could ultimately result in constraints on the Grid). Houses near transmission lines can also constrain Transpower’s access for maintenance and upgrade work (which can in turn, require new assets to be built at significant cost). It is for these reasons that development near the National Grid needs to be carefully managed. 23. The photos attached as Appendix C show residential and subdivision developments that have occurred over time under and around existing National Grid lines. These developments impede maintenance and upgrade activities and create reverse sensitivity impacts on the Grid and increase risks from electrical hazard risks. Underbuild also results in long-term costs to New Zealand. If a programme of regular maintenance and upgrade work cannot take place, then more substantial and costly work is required and much sooner than it would otherwise have been. Protecting the infrastructure now through compatible surrounding land use activities, enables regular maintenance and upgrade work to occur. The National Policy Statement on Electricity Transmission 24. The National Policy Statement on Electricity Transmission (NPSET - attached as Appendix D) was gazetted in March 2008 following a Board of Inquiry and Cabinet process. The NPSET recognises that activities, particularly sensitive activities1 such as houses, can impact adversely on National Grid assets (overhead transmission lines, underground cables and substations). 25. Policy 11 requires local authorities to consult with Transpower to identify “an appropriate buffer corridor within which it can be expected that sensitive activities will generally not be provided for in plans and/or given resource consent”. Transpower considers that this area is 12m either side of centerline and 12m from the outer edge of the support structures. (During maximum wind conditions, the conductors swing much further than this distance – see the photo in Appendix E) 26. Policy 10 requires decision-makers to manage activities to avoid reverse sensitivity effects on the Grid. Decision-makers must also ensure that the operation, maintenance, upgrade and development of the Grid is not compromised. 27. National policy statements must be given effect to in local authority planning documents. Councils had four years from April 2008 to notify and process a plan change or review to give effect to the NPSET objective and policies. Currently, only 27 councils have implemented the NPSET. 1 “Sensitive activities” are defined in the NPSET to include “schools, residential buildings and hospitals”. 4 28. Transpower’s approach to NPSET implementation is to seek consistent provisions nation-wide. A slightly different approach is taken depending on whether an area is greenfield or developed urban / industrial. However, with respect to housing a consistent approach is taken in all planning zones. Simply put, housing should