There is no definition in the Bill as to what a "base-load" or "non-base load" plant is. The conventional is that a base-load plant runs continuously throughout the year except for maintenance or repair to meet the "base-load" - the minimum level of demand on an electrical supply system over a 24-hour period.

Any plant other than this could qualify for an exemption, leaving tremendous scope for uncertainty in the Bill.

The difference between base-load and peak-load plants is a matter of degree, and thus the considerable amount of uncertainty inherent in the criteria for exceptions.

How the Minister in considering an exemption application or the Electricity Commission recommending an application construes what a "non-base load" plant will create fertile ground for a judicial review challenge based on an error of law by those seeking or opposing an exemption.

If the ban is implemented, then the exemptions which were deemed necessary to maintain security of supply could prove to be legally difficult to negotiate.

Given the lack of clarity in the Bill and the lack of predictability in the exercise of a discretionary power by the Minister it is highly uncertain legally as to how the exemption regime will operate. Given that the exemption regime is insurance the government is to provide for continued security of supply, this is concerning.

Bryan Gundersen

Partner

Kensington Swan, Lawyers

New Zealand