532 NEW ZEALAND GAZETTE No. 16

will create credits equal to double the MW capacity which is transferred, in recognition of the fact that any sale will both increase non-ECNZ generation and decrease ECNZ generation.

Explanatory note:

Paragraph 19 has been included for the sake of completeness, as the rules set out in this Appendix are intended to apply for so long as ECNZ’s share of the total New Zealand generating capacity is more than 45%.

As stated above, the Government has ruled out privatisation, and any restructuring that has as its aim the sale of any major component of ECNZ.

20. For the avoidance of doubt the transfer of ECNZ power stations to the new SOE pursuant to this Memorandum will not create credits.

21. In this Appendix, ‘transfer’ means a completed transfer to a non-ECNZ party of effective control.

Acquisitions by ECNZ

22. The acquisition of effective control of any existing generating capacity, or any additional generating capacity for which credits have been created, by ECNZ from a non-ECNZ party will reduce ECNZ’s entitlement by double the MW capacity of the capacity acquired.

Decommissioning of stations

23. Meremere and Marsden A and B: ECNZ will receive no credits on decommissioning Meremere and/or Marsden B. ECNZ will receive 60 MW credits on decommissioning Marsden A.

24. Small hydro stations: ECNZ will receive no credits on decommissioning any or all of the Cobb, Coleridge, Highbank, Matahina, Mangahao, Tuai, Piripaua, and Kaitawa hydro stations.

25. Other ECNZ stations: On decommissioning the whole or part of any ECNZ station other than those referred to in paragraphs 23 and 24, ECNZ will receive credits equal to the reduction in the MW capacity of the station as a result of the decommissioning.

Refurbishments and modifications

26. Meremere and Marsden A and B: Any refurbishment or modification to any of the Meremere, Marsden A or Marsden B thermal stations which increases its capacity above its ‘deemed capacity’ will be debited against ECNZ’s entitlement for the amount of the increase above the deemed capacity. For the purposes of this paragraph, Meremere and Marsden B (which are currently mothballed) will be deemed to have a capacity of zero MW, and Marsden A will be deemed to have a capacity of 60 MW.

27. Huntly: Any increase in Huntly’s capacity to above 1000 MW (other than an increase to 1075 MW in an emergency situation) will be debited against ECNZ’s entitlement.

28. All ECNZ hydro stations: Any increase in the capacity of any ECNZ hydro station will be debited against ECNZ’s entitlement, except that any refurbishment or modification of an ECNZ hydro station which extracts more electrical energy from the amount of water which is available from the station’s current catchment configuration will not be debited against ECNZ’s entitlement. For the avoidance of doubt—

• this exception is intended to permit more electrical energy to be extracted from the current ‘head’ and intake water volumes for each station, without debitting ECNZ’s entitlement;

• ECNZ’s entitlement would be debited for increases in MW capacity which result from the installation of any systems to increase the amount of water which feeds into, or is retained by, a catchment area.

Co-generation and generation from non-traditional renewable sources

29. Any additional capacity using co-generation or non-traditional renewable sources—

• if provided by a non-ECNZ party, will not create credits;

• if provided by ECNZ, will not incur debits.

In this Appendix,—

‘Co-generation’ means generating plant where a significant proportion of the heat input is a by-product of another process, or where a significant proportion of the generation waste heat is used as a source of heat for another process; and, in any case, the electricity generated must be used principally on-site.

‘Non-traditional renewable sources’ mean renewable energy sources other than hydro and geothermal.

Implementation

30. The cap will be included in ECNZ’s Statement of Corporate Intent by direction of the shareholding Ministers under section 13 of the State-Owned Enterprises Act 1986.

31. The cap will be administered by the Secretary of Commerce. In particular, the Secretary will make final decisions on credits and debits. In deciding on the application of the rules for determining ECNZ’s entitlement, the Secretary will have regard to the objective set out in paragraph 1 above.

32. ECNZ’s entitlement must be verified by the Secretary of Commerce before ECNZ commits itself to provide additional generating capacity.

Duration

33. The cap will cease to apply when ECNZ’s share (including its interests in joint ventures and in companies ring-fenced under Appendix 5) of the total New Zealand generating capacity measured in MW capacity terms is less than 45% of that total, and that share has been verified by the Secretary of Commerce.

ANNEX A

Illustration of Entitlement System

Net change in generating capacity:
ECNZ (including any unused entitlement carried forward at the end of the period covered by the table) 650 MW
Non-ECNZ 650 MW

Aₙ₊₁ = C₁ - Dₙ; C₁ = A₁ + Bₙ; where t = 1..n.