✨ Financial Guidelines for Ring Fencing
29 NOVEMBER NEW ZEALAND GAZETTE 4531
Objectives of Ring-Fencing
6 The MoU states that:
Objective
- Additional generating capacity provided by ECNZ in New Zealand will be "ring-fenced" in order to -
-
restrict ECNZ’s ability to cross-subsidise the additional capacity and thereby ensure that the electricity produced from the additional capacity is priced to reflect the full cost of producing it; and accordingly
-
facilitate competitive entry into the electricity market by other generators and demand-side management suppliers.
General Rule
- Ring-fencing will be required for any additional generating capacity provided by ECNZ in New Zealand where the capacity is more than 10 MWs and -
-
ECNZ would have effective control over the development of the capacity; or
-
ECNZ would have effective control over the sale to any wholesale buyer (other than ECNZ) of all or any part of the electricity produced from the capacity.
- However, any refurbishment or modification of an existing generating station which does not require ECNZ’s entitlement to be debited under the cap regime in Appendix 4 [of the MoU] will not have to be ring-fenced.
Key Elements
- Ring-fencing of additional generating capacity will require² -
a the formation of a separate company to provide the additional capacity, which must be operating before tenders are called for the purchase of major plant or major capital works; and
² The five points in this paragraph were not numbered in the MoU. Numbering has been added here for ease of reference.
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VUW Te Waharoa —
NZ Gazette 1996, No 172
NZLII —
NZ Gazette 1996, No 172
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Financial Guidelines for Ring Fencing of Additional Generating Capacity by ECNZ
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💰 Finance & RevenueFinancial Guidelines, Ring Fencing, Generating Capacity, ECNZ