ComCom decision rams home need for more leeway in electricity reliability standards

News | 06 September, 2018
A Commerce Commission decision today shows the importance of giving electricity distributors greater flexibility in meeting their reliability standards without facing financial penalties.

“The Electricity Networks Association will be presenting proposals to the Commission by the end of September seeking this flexibility in the next regulatory period beginning April 2020,” said Graeme Peters, chief executive of the Electricity Networks Association. 


The Commission today turned down a request from Auckland lines company Vector, which asked the regulator for leeway after changes to its workplace safety practices impacted its compliance with the Commission’s quality standards.


Vector asked the electricity regulator for a ‘reopener’ of its five-year agreement on price and quality to take account of the higher number of outages following its changes to worker health and safety requirements.


Enacted in April 2016, the Health and Safety at Work Act was accompanied by strong messages from the government and WorkSafe about enhancing worker safety, and which led to a reappraisal of ‘live line’ working.


A consequence of that review, and practices offshore, led Vector and other electricity lines companies to significantly reduce their ‘live line’ work, or quickly turn off lines it suspected might be posing a risk to the public. De-energising lines was an enhancement to safety and met the new Act’s clear message that employers must “eliminate risks to health and safety, so far as is reasonably practicable”.


The fresh look at live line practices has led to longer and more frequent outages. Some lines companies breached their agreed target with the Commission that was based on historical outages, which were set before the health and safety regulations were changed.


Limits were exceeded four times in 2014, nine times in 2017, and 13 times in 2018 by 17 electricity lines companies.


Peters said that the ENA was disappointed with the Commission’s decision based on the current strict criteria for approving a reopener.   


“The Commission said that Vector’s application did not meet the criteria, which shows that the criteria is so strict that it is not giving the Commission enough flexibility to reinterpret its own rules in light of new legislation elsewhere.


Though we are disappointed that the reopener has been declined, the ENA is encouraged by the Commission’s statement that lines companies should not be unfairly penalised for implementing changes they consider are necessary to meet their health and safety obligations. 


“That’s an encouraging acknowledgement from the Commission that it won’t wave a big stick and fine electricity lines companies if they are trying their best to keep their workers and the public safe and this leads to more outages.”


The reliability standards that apply from April 2020 will be reviewed over the next year. An ENA working group is recommending more flexibility to accommodate changes in lines company operating environments – including new approaches which are intended to enhance the safety of workers and the public.


For more information

Graeme Peters 027 66 77 400