NZIER report on compensation for transmission infrastructure
NZIER report on compensation for transmission infrastructure
NZIER report on compensation for transmission infrastructure
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1. Background<br />
New Zealand electricity is generated at hydro, thermal, geothermal and wind power<br />
stati<strong>on</strong>s scattered throughout the North Island and hydro and wind power stati<strong>on</strong>s in<br />
the South Island. Load is at highly populated areas, generally in the North Island<br />
while generati<strong>on</strong> capacity is in lightly populated areas, with hydro storage mainly in<br />
the South Island. As a c<strong>on</strong>sequence there is approximately 12,000 kilometres 1 of<br />
transmissi<strong>on</strong> <strong>infrastructure</strong> in New Zealand linking generati<strong>on</strong> capacity and storage<br />
with commercial, industrial and residential end users. The majority of transmissi<strong>on</strong><br />
towers and lines are <strong>on</strong> and over private property, predominantly land used <strong>for</strong><br />
farming. 2<br />
Transpower was established as a State Owned Enterprise in 1987 to own and<br />
operate the nati<strong>on</strong>al electricity transmissi<strong>on</strong> grid, having been mandated the<br />
resp<strong>on</strong>sibility of transmitting electricity in New Zealand. Transpower ownership of and<br />
access to transmissi<strong>on</strong> <strong>infrastructure</strong> <strong>on</strong> private land is covered under statutory<br />
provisi<strong>on</strong>s, in effect an eminent domain 3 <strong>for</strong> lines built prior to 1988 (about 95% of all<br />
lines), and easements or similar rights <strong>for</strong> lines c<strong>on</strong>structed post 1988. 4 Pre 1988<br />
<strong>infrastructure</strong> was built by the public sector with rights of ownership and access<br />
transferred to Transpower in 1988. Transpower‟s rights to both pre and post 1988<br />
<strong>infrastructure</strong> include ownership or, where it does not own land, access <strong>for</strong><br />
inspecti<strong>on</strong>, operati<strong>on</strong>s and maintenance. These rights bind successive title holders. 5<br />
1.1 Compensati<strong>on</strong><br />
Anecdotal evidence suggests that there was no standard approach to compensating<br />
farmers <strong>for</strong> transmissi<strong>on</strong> <strong>infrastructure</strong> built <strong>on</strong> their land prior to 1988. It appears that<br />
in some cases landowners received a small financial or other <strong>on</strong>e-off payment in kind<br />
(such as having an access track built). In other cases landowners received no<br />
compensati<strong>on</strong> <strong>for</strong> the <strong>infrastructure</strong> built <strong>on</strong> their property.<br />
Currently when Transpower wants to build new <strong>infrastructure</strong> and cannot or does not<br />
wish to purchase the required land, it is obliged to negotiate an easement with the<br />
landowner. In the event that negotiati<strong>on</strong>s are unsuccessful the enterprise can apply<br />
to acquire land under The Public Works Act 1981. This opti<strong>on</strong> of compulsory<br />
purchase is seen as necessary, partially because of the nati<strong>on</strong>al interest functi<strong>on</strong> of<br />
transmissi<strong>on</strong> lines and partially to prevent landowners from attaining m<strong>on</strong>opoly<br />
powers and stopping a line from being completed or excessively inflating costs.<br />
1 Transpower at http://www.transpower.co.nz/transporting-power<br />
2 In urban areas transmissi<strong>on</strong> <strong>infrastructure</strong> is often beside roads rather than being built <strong>on</strong> private<br />
land.<br />
3 Eminent domain is a power provided by the State to utilities allowing them to expropriate or take<br />
a citizen‟s property rights with compensati<strong>on</strong>.<br />
4 An easement is a “n<strong>on</strong>-possessory” right to use another party‟s property.<br />
5 Transpower landowner‟s manual.<br />
<str<strong>on</strong>g>NZIER</str<strong>on</strong>g> – Compensati<strong>on</strong> <strong>for</strong> transmissi<strong>on</strong> <strong>infrastructure</strong> 7