New Zealand Gazette – 1996 – No. 172

Page 4532

✨ Financial Guidelines for Ring Fencing



4532 NEW ZEALAND GAZETTE No. 172

b ECNZ to charge the separate company on the basis of full costs for any capital, goods (except gas), and services it provides to the company, and on the basis of full opportunity costs for gas; and

c where the electricity produced by the separate company is sold on contract, the contract is to be completely separate from any contract for electricity produced by ECNZ or any person associated with ECNZ; and

d the achievement of a proper commercial return on the assets and shareholders funds in the separate company; and

e the separate company and ECNZ to comply with the financial guidelines established under paragraph 6 below.

Editorial note: In these guidelines, the "separate company" will henceforth be termed the "ring-fenced entity" ("RFE") or "entities" ("RFEs") as the case requires.

7 The MoU also notes that:

  1. For the avoidance of doubt, a ring-fenced company would be permitted to raise debt capital backed by guarantees from ECNZ, so long as an appropriate level of equity finance was provided to the company by ECNZ.

8 Further, the MoU states that:

  1. The Secretary of Commerce will make the final decision on whether additional generating capacity is required by paragraph 2 above to be ring-fenced, having regard to the objective in paragraph 1 above.

Financial Guidelines for Accounting Policies

Guideline for Accounting Standards

9 In relation to the RFE, ECNZ will comply with all the relevant accounting concepts and standards as promulgated by the Institute of Chartered Accountants of New Zealand and approved by the Accounting Standards Review Board. Any departures from the policies used by ECNZ will be fully justified to the independent auditor.

3 The paragraph references in this paragraph relate to Appendix 5 of the MoU, not to these guidelines.



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✨ LLM interpretation of page content

💰 Financial Guidelines for Ring Fencing of Additional Generating Capacity by ECNZ (continued from previous page)

💰 Finance & Revenue
Financial Guidelines, Ring Fencing, Generating Capacity, ECNZ, Accounting Policies, Accounting Standards
  • Secretary of Commerce