Manawa Energy Ltd v Electricity Authority

Link copied
Case Copied 70 min read

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE

CIV-2020-485-367

[2022] NZHC 1444

UNDER the Judicial Review Procedure Act 2016

IN THE MATTER OF

an application for judicial review of a

decision of the Electricity Authority pursuant to the Electricity Industry Act 2010 and the Electricity Industry Participation Code 2010 to issue new guidelines for the development of a new transmission pricing methodology

BETWEEN

MANAWA ENERGY LIMITED

Applicant

AND

ELECTRICITY AUTHORITY

First Respondent

Continued . . .

Hearing: 18 to 22 and 26 to 27 October 2021

Counsel:

J E Hodder QC, B A Davies and A M B Leggatt for the Applicant D A Laurenson QC, J H Stevens and L J Hardcastle for the First

Respondent

J D Every-Palmer QC and T Mijatov for the Second Respondent Appearances excused for the First Interested Party

I R Millard QC and J A Tocher for the Second Interested Party M N Dunning QC for the Third Interested Party (by VMR)

T D Smith and C J Edwards for the Intervener

Judgment:

20 June 2022


JUDGMENT OF PALMER J


MANAWA ENERGY LIMITED v ELECTRICITY AUTHORITY [2022] NZHC 1444 [20 June 2022]

Continued . . .

MERIDIAN ENERGY LIMITED

Second Respondent

AND

NEW ZEALAND STEEL LIMITED

First Interested Party

NOVA ENERGY LIMITED

Second Interested Party

FONTERRA CO-OPERATIVE GROUP LIMITED
Third Interested Party

AND

TRANSPOWER NEW ZEALAND

Intervener

Solicitors:

MinterEllisonRuddWatts, Wellington Bell Gully, Wellington

Meridian Energy Ltd, Wellington Franks Ogilvie, Wellington

Fonterra Co-operative Ltd, Auckland Nova Energy Limited, Wellington Chapman Tripp, Wellington

Contents

Summary................................................................................................................. 1

Electricity Transmission pricing regulation......................................................... 1

Phases of regulation  2
Electricity Industry Act 2010  6
Empowering framework for the Code  8
The Electricity Industry Participation Code 2010  10

The 2020 Guidelines  12

The application for judicial review..................................................................... 15

The parties  15
Approach to judicial review  17

Issue 1: Statutory objective and role.................................................................. 22

Relevant provisions  22

Submissions  23
The Authority’s statutory objective and role  26

Issue 2: Pre-determination and bias................................................................... 39

Relevant law of pre-determination and bias  39

Submissions  40

Was the 2020 Decision biased or pre-determined?  42

Issue 3: Cost-benefit analysis.............................................................................. 46

The use of cost-benefit analyses  46
Relevant law of cost-benefit analysis  47

Submissions  48
Cost-Benefit Analysis  51

Issue 4: Other challenges to the residual charge............................................... 58

The residual charge  59
Relevant considerations, irrelevant considerations and unreasonableness        63

An unlawful tax  66

Material error of fact  67

Relief...................................................................................................................... 67

Result..................................................................................................................... 68

Summary

[1]    Virtually all New Zealanders use electricity. Most electricity in New Zealand is transmitted by Transpower New Zealand Ltd (Transpower) from its point of generation to wholesale suppliers, who then transmit it to retail suppliers. As a natural monopoly, Transpower’s pricing affects the whole electricity industry and the allocation of some $800 million of charges each year. It is accordingly subject to regulation by the Electricity Authority (the Authority). In 2020, the Authority issued guidelines (the Guidelines) under the Electricity Industry Act 2010 (the Act) for Transpower to develop a Transmission Pricing Methodology (TPM). Different entities…

CaseChat AU logo

Keep reading for free

Create a free CaseChat account to read Manawa Energy Ltd v Electricity Authority and more:

  • Read every judgment in full
  • Ask AI and get answers linked to paragraphs
  • See how each paragraph was cited in later cases
  • Download judgments as PDF or Word
Continue with Google

One click creates your free account or signs you in.

By continuing you agree to the Terms and Privacy Policy.

Details
Case
[2022] NZHC 1444
Decision Date

CaseChat Overview and Summary

The case of Manawa Energy Ltd v Electricity Authority is a judicial review of a decision made by the Electricity Authority under the Electricity Industry Act 2010. The Authority issued guidelines for the development of a new transmission pricing methodology, which was challenged by Manawa Energy Ltd, with support from New Zealand Steel Ltd, Nova Energy Ltd, and Fonterra Co-Operative Group Ltd. The challenges focused on the Authority's interpretation of its statutory objective, the use of cost-benefit analysis, and the imposition of a residual charge.

The court found that the Authority did not misconceive its statutory objective or role, and that there was no evidence of bias or pre-determination in the decision-making process. The court also held that the Authority's use of cost-benefit analysis was not unlawful, as the Act does not require quantification at all, let alone quantification to a particular standard, or quantification of each element of the Guidelines. The court found that the Authority's decision in relation to the residual charge did not take into account irrelevant considerations or fail to take into account relevant considerations, did not impose an unlawful tax, was not based on a material error of fact, and was not unreasonable.

Overall, the court held that the challenges to the Authority's decision largely reflected the challengers' disagreement with it and sought to draw the Court into the economic merits of the decision. However, it is the Authority's role, not the Court's, to assess the merits of the competing policy arguments. The application for judicial review was dismissed.

Orders

Orders of the court

Full text does not contain this section.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.