WHEN the Energy Companies Act 1992 (ECA) was enacted on June 25, 1992 it was to be administered in the Ministry of Commerce for the Minister of Energy.
Unique to that Act was provision for a new entity termed an “approved person” or persons. This was “a person (other than a local authority) who is identified in an approved Establishment Plan (EP) to which voting equity securities in an energy company shall be issued and who is approved by the Minister, by notice in the Gazette, for the purposes of Part 4” i.e. re energy companies.
Together with 31 EPs of other power boards, our Poverty Bay Electric Power Board was required to indicate in a s 22 share allocation plan (s 18(2)(c) ECA) “the person or persons, or the class or classes of persons to whom the voting equity securities should be allocated”.
That allocation plan formed part of the EP and, if the plan was approved, so too would be the allocation plan and the trustees of the trust recommended in the plan would be “approved persons”.
On March 10, 1993 officers of the Ministry of Commerce wrote to the Minister of Energy in a report on the PBEPB’s Establishment Plan, which had been submitted for approval.
It could be deemed a Clayton’s report, making numerous recommendations to the Minister yet advising him “not to act under the direction of any other person: cl 2 R.”
Undeterred, the officers provided direction under subheadings including “The Role of the Minister in considering EPs”, an “Outline of proposal”, the “Validity of the Plan”, and “Approved person”. Under that latter subheading, clause 17 of the report stated:
“In this case the Eastland Energy Community Trust is a body which, if the plan is approved, will specifically hold shares on behalf of all electricity consumers in the community. As such it should be designated as an ‘approved person’. A Gazette notice will be prepared to give effect to this at the appropriate time.”
This was gazetted on May 6, 1993 (vesting order number 1993/119, enacted 3/5/93). However, nowhere in that order was mention made of the term “electricity consumers in the community”.
Although the ministry had drafted a letter to the board for the Minister’s signature to decline to approve the plan, pending the board amending the proposed trust deed, when cl 2(1) of that order did confirm that the “establishment plan had been approved by the Minister in respect of the board” on March 25, 1993 — only those two amendments had been made by the board as per the recommendations in cl 32(d) of the report.
Neither the Minister, the ministry or the Crown Law Office appear to have realised that for the trustees to “specifically hold shares on behalf of all electricity consumers”, it was necessary (before approval) for there to have been a separate class of shares held by the trustees specifically to benefit the electricty consumers by way of the constitution of the energy company; cl 5 Purpose of the Trust and cl 6 Application of the Trust Fund also probably needed amending so that the exercise of the powers of the trustees under those clauses were not “in their sole discretion”.
Also, the definition in cl 1.3 “beneficiary” in the trust deed required amendment as paragraph 1.3(v) refers solely to a “person listed in the records of the company as a person connected to the company’s electricity distribution system” who (whether corporate or not) had been other than a “natural person domiciled in the district” but was a person ascertained to be “conducting an activity or carrying on business in the district”.
It is submitted that such a definition is administratively unworkable in spite of past and present trustee interpretations of that word compared with the term “all electricty consumers in the community”.