$1.5b power upgrade 'at risk'

By KEVIN TAYLOR political reporter

National grid operator Transpower wants the Resource Management Act changed because it says the law is putting a vital $1.5 billion upgrade of the grid at risk.

The revelation comes just a week after another state-owned enterprise, Meridian Energy, axed the $1.2 billion Aqua power project in the Waitaki Valley.

Transpower - which warns that the national grid is running out of capacity - wants a national interest clause included in the RMA and has been talking with ministers and officials for over a year.

Meridian last week cited commercial uncertainties arising from the planning process, fights over water rights, and technical concerns for shelving Aqua, which would have provided a big chunk of cheap new generation.

Chief executive Keith Turner said the RMA should be rethought so it could deal better with major projects such as new hydro generation.

A Transpower spokesman said yesterday that it wanted "some explicit recognition in the RMA decision-making process of national-development-type projects, and mechanisms that would allow the national benefit to be balanced against local cost".

Transpower's half-year report tabled in Parliament last week said the SOE was concerned that the act's application would place at risk its plans for "timely significant grid enhancement".

The report said local decision-making did not always provide an adequate mechanism or incentive for local impacts to be balanced against national benefits.

The spokesman said the existing grid was built in the 1950s and 1960s under a different legislative framework and Transpower had not built many lines in recent years. It was concerned different rules would be applied as the proposed transmission lines cross more than one local authority territory.

"We don't have any issue with the philosophy behind the Resource Management Act. We are really saying the way it operates in practice has the potential to cause us some significant delays."

Asked what progress had been made in discussions with the Government, he said, "Nothing specific at this stage".

The Government revealed last week that new Cabinet minister David Benson-Pope had been asked to review the RMA.

Yesterday he told the Herald he was not convinced a national interest clause was the way to go.

"There's nothing that's not on the table, but I'm not of a view at the moment that that's necessary.

"I think there may be other ways of meeting the concerns they have without exposing ourselves to the National Development Act-Clyde Dam scenarios."

He said the Government would look at the cross-council issues Transpower cited, but he had no view yet of the most appropriate solution.

Transpower chief executive Dr Ralph Craven told a power conference last week that the national grid was running out of capacity and without significant investment there was a growing risk that technical failures in winter could lead to voltage collapse and blackouts.

Transpower wants to enhance transmission capacity into Auckland and Christchurch by 2010 and improve the high-voltage direct current (HVDC) link between Benmore dam in the Waitaki Valley and Wellington.

The plans calls for a new line from Whakamaru to Otahuhu, and another between the Waitaki Valley and Christchurch. The two projects require Transpower to get consent for up to 450km of easement, about 65m wide.

National energy spokesman Roger Sowry said the Government needed to act.

"One of the things Meridian pulling the plug on Aqua highlights is the same as Auckland roading - that major infrastructure projects have a huge problem in getting approval through the Resource Management Act."

Transpower needed access to land, and in some cases would be putting up extra wires or increasing the diameter of existing wires.

"All of those things are notifiable through the RMA and the process just takes so long and the cost is so horrendous with no certainty of outcome ... "

NATIONAL GRID PLAN

Transpower's $1.5 billion grid investment plan:

* A new line from Whakamaru into Auckland to increase capacity into the city.

* Another new line from the Waitaki Valley to Christchurch to raise capacity.

* Upgrade the high-voltage direct current (HVDC) link from the Benmore Dam in the Waitaki Valley to Wellington.