NZ Government To Review Electricity Sector’s Continuance Of Supply Obligation – Bell Gully

LAWFUEL – The Legal Newswire – The Government has published a discussion document proposing a review of Section 62 of the Electricity Act 1992 – the Continuance of Supply Obligation.

Section 62 of the Electricity Act 1992 (the Act) provides that New Zealand lines companies are required to continue to supply line services to places that were supplied as at 1 April 1993. This provision remains in place until 31 March 2013.

Consumers in remote rural areas, where the provision of line function services is often uneconomic due to the large distance between customers and the relative expense of servicing the lines, are most likely to be affected by the expiry of the continuance of supply obligation. Under current law, from 1 April 2013 lines companies will no longer be statutorily required to provide a connection to remote rural, or any, customers. The most likely consequence is that, as lines become damaged after weather events or generally become unusable, supply will either be terminated or the cost to consumers in remote rural areas will increase significantly.

The Ministry of Economic Development (MED) has asked for public comment by 28 September 2007 on a range of options to replace the continuance of supply obligation. These are set out in the table below.

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