The Electricity Authority Te Mana Hiko (Authority) has withdrawn a formal complaint alleging a breach of the Electricity Industry Participation Code by Transpower relating to the collapse of a Northland transmission tower in 2024.

After careful consideration of Transpower’s expert and factual evidence, informed by international expert review, the Authority now considers that there is insufficient evidence to support its complaint.

The complaint to the independent Rulings Panel alleged Transpower failed to adhere to good electricity industry practice in its assurance practices relating to its contractor’s work on the transmission tower at Glorit which collapsed on 20 June 2024.

The tower’s collapse left 88,000 customers without power and cost the Northland region tens of millions of dollars. Supply was partially restored after approximately 104 minutes, and fully restored after three days.

The Authority lodged the complaint with the Rulings Panel following a compliance investigation because it had identified an apparent breach of the Code, and the alleged breach was significant in its duration, severity and impact, it involved a critical asset and undermined security of supply.

Transpower’s maintenance obligations under the Code are defined by reference to good electricity industry practice. This is a standard that involves a high degree of judgment and needs to be assessed by reference to international practice.

During the litigation phase of the complaint, Transpower provided evidence relating to its assurance processes, providing an explanation of its overall risk management framework that was not provided previously. The Authority’s international expert now considers that, at the time, a low risk rating was consistent with good electricity industry practice and Transpower met the good electricity industry standard.

In light of the expert evidence on good electricity industry practice, the Authority is considering whether changes are required to the standard in the Code or a better approach is required to reflect New Zealand’s specific circumstances.

Report into tower’s collapse

Separate to the narrow focus of the compliance investigation, a report into the tower collapse was requested by the Minister for Energy in June 2024.

Its aim was to understand what went wrong, and to identify gaps in the system that allowed such an event to occur.

It found the transmission tower collapsed when nuts securing tower legs to the tower foundations were removed during planned maintenance work by Transpower’s service provider in the Northland region, Omexom. The report said the collapse should never have occurred and could have been prevented, had better systems and processes been in place.

The report made 26 recommendations for Transpower, Omexom, the Electricity Authority and the Ministry of Business, Innovation and Employment focused on improving resilience, processes for maintenance work and grid maintenance contracting arrangements and assurance processes.

All of the 19 recommendations for Transpower have been completed, which, along with the other recommendations will improve the resilience, safety, and reliability of New Zealand’s electricity system.

Background

The Rulings Panel is an independent body that determines breaches of the Code and may make appropriate remedial orders under section 54 of the Electricity Industry Act 2010.

If the Rulings Panel upholds a complaint, it has the power to make remedial orders against industry participants. Remedial orders include pecuniary penalties, compliance orders, compensation orders, and private and public warnings or reprimands.

The alleged breach was of clause 12.113 of the Code which states: Transpower to maintain interconnection assets - Transpower must design, construct, maintain and operate all interconnection assets in accordance with good electricity industry practice.

Under the Electricity Industry (Enforcement) Regulations 2010, the total liability for a breach of clause 12.113 of the Code by Transpower for breaches under Part 12 of the Code (including both pecuniary penalties and compensation orders) is limited to $2 million.

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