Trust Horizon (Trust Variation) Bill

Thank you, Madam Chair. As you’ve rightly pointed out, this is a bill of five clauses. That’s one part, and the preamble is a relatively substantial part of the bill.

In the preamble, it sets out that Trust Horizon is a registered charity in terms of what that charity can do under the Energy Companies Act 1992 and what it has done, and then it talks the energy-related purposes. Before we get into the questions about this, I just would like to congratulate the member Dana Kirkpatrick, who has brought this bill to the House on behalf of her local community and has worked across the House to ensure that people have access to information and support the bill. That doesn’t mean we don’t have some questions, though, as we go through in terms of this.

In terms of the preamble, one of the main things that this centres on, and we’ll come more to this also when we get to clause 3 of the bill, which is the purpose clause—that’s the other bit where we’ll get a chance to discuss this. But this is really cutting to the heart of it in the preamble, where it says, in recital (10), that “The trustees consider that it is desirable to amend the terms of trust to—(a) broaden the Trust’s objects”. That’s really what this bill is doing. It’s saying that this trust can do more than fund energy-related projects and it wants to broaden it out. There was a lot of talk around that.

Now, this is a relatively important point for us to consider, because this is coinciding with some work the Government is currently putting through in terms of looking at changes for electricity distribution businesses—or our EDBs—or our lines companies, as civilians are more likely to call them, and the way in which they operate and how this will intersect with some of the changes that are going through with that work. I do note that there is different legislation that covers different kinds of lines companies and I have been in discussion with the member Dana Kirkpatrick, whose bill this is in the name of, and she has provided me some of the advice that she’s received around the intersection with that broader work that the Government is currently going through around reforming our lines companies. I’d be interested to hear from the member in the chair any further elucidation that he could give us on behalf of the sponsoring member on that.

The bill’s preamble notes that the Charitable Trusts Act 1957 allows the High Court to approve a variation of a trust deed. Under the Act, the court has the power to vary the purpose of a trust in certain circumstances.

In relation to this and what the member Megan Woods is asking around energy-related purposes, the Ministry of Justice’s advice to the Social Services and Community Committee was that, to the best of its knowledge, 35 trusts were established following the Energy Companies Act 1992, including Trust Horizon. Of those trusts, there are only six other charitable trusts. Those six charitable trusts are the Otago Central Electric Power Board, now Central Lakes Trust; the EnergyDirect Community Trust, now Hutt Mana Charitable Trust; Powerco Wanganui Trust, now Four Regions Trust; Rotorua Energy Charitable Trust; Taranaki Electricity Trust; and the TECT Community Trust. None of those six charitable trusts are limited to energy-related purposes. The proposal to broaden the trust’s charitable purposes therefore brings it into line with other charitable trusts. It does not seek special treatment.

I appreciate the position that the member Tom Rutherford is filling in for a colleague here, but there are some very specific questions, and I know that there are some officials in the Chamber that may be able to assist with this.

It’s really about how this bill is going to sit alongside option 3B in the Ministry of Business, Innovation and Employment’s current Discussion document for the electricity distribution businesses. This is a piece of work that is looking at how it is that our electricity distribution businesses are going to operate. Option 3B relates to restricting ancillary investments in activities; requiring electricity distribution revenues to be spent on electricity distribution services; prudent dividend policies and prioritising consumer rebates; and affordability outcomes ahead of distribution used for broader community purposes, such as community grants. That’s explicitly in a discussion document that the Government has under way. This is really how this private bill is going to sit alongside those changes if they were to be enacted. I’m sure that the officials can give some advice. It’s really around the nature of this being a charitable trust and the different structure a number of our lines companies have.

None the less, I think it is important that, as this bill goes into this committee stage—given that this discussion document that I’m talking about has come out since the select committee process concluded, so this wasn’t an issue that was able to be discussed at the Social Services and Community Committee, or for members to ask questions about it, because it is quite fundamental that we have one part of Government that’s got a discussion document out there restricting the ability of lines companies to make investments in ancillary services. I mean, we have seen examples of lines companies buying wineries, for example, and, as much as people might like to buy wineries, I think many of us can agree that it probably isn’t the core purpose of a lines company. So just how and what advice has been received, if any, and how does that sit alongside that piece of work?

Thank you, Madam Chair, and thanks to the member Megan Woods for the question. I do have advice on that. The question the member is asking about is about option 3B in the Ministry of Business, Innovation and Employment’s Discussion document for the electricity distribution businesses, which was published in August 2026. Option 3B relates to restricting ancillary investments and activities, requiring electricity distribution revenues to be spent on electricity distribution services, prudent dividend policies, and prioritising consumer rebates and affordability outcomes ahead of distributions used for broader community purposes, such as community grants.

The answer to the member’s question is that the ability to progress and implement such reforms would not in any way be impeded by the passage of the current bill. The sort of reforms contemplated in option 3B, if they did become Government policy, could only be implemented by primary legislation, so any changes on the line company reform would require primary legislation. Nothing in this bill would prevent any reform by primary legislation that may come out in future reforms.

I appreciate the member Tom Rutherford getting that advice, and I also appreciate that this wouldn’t restrict the ability to change primary legislation. The question is more flipped the other way; that if those changes were to go through, such as outlined in option 3B in the Ministry of Business, Innovation and Employment discussion document, whether they’d have to come back and make changes to this trust.

I’m no fortune-teller, so I can’t tell you what may or may not happen with future legislation, but my understanding is that you would not have to come back and change this legislation if that legislation was to progress in the future.

CHAIRPERSON (Maureen Pugh): I am not quite sure about scope, either, because a discussion document is not law. This bill is going through the passage of legislation under the current laws, not future laws, if any. So I think we’ve probably exhausted that topic.

Thank you, Madam Chair. As I said, it is an important context for this bill that has changed since it went through the select committee stage, so it was important to have the opportunity to ask those questions.

My questions, now, are around the changes that will be a result of this piece of legislation, which is that we can have this energy trust, who are able to distribute money for things other than energy purposes. They have around $200 million worth of assets in the energy field, but this will open it up. There will be housing, community, sports, cultural, a whole range of organisations that potentially can get grants from this trust.

One of the things that hasn’t been dealt with in this legislation and the change around it is prioritisation. I’m just wanting to know whether this is something that the member Dana Kirkpatrick, who is sponsoring the bill—and I appreciate it’s a different member in the chair—has received any advice or had discussion with officials or, indeed, with the trust around prioritisation. The Act is silent on this; it merely changes the purpose of how the money can be distributed and expands it out—for example, was there any discussion around protected minimum allocations for energy initiatives? Was that something that was anticipated? While it’s broadening out, I think most people can see that there’s a whole lot more that needs to be done in energy. I think we can look at the SEANZ—the Sustainable Energy Association of New Zealand—we can look at the contribution they made in their submission to the Social Services and Community Committee on this, which argued that we are far from having our lines companies exhaust the opportunities of where they could be supporting communities in terms of electrification and what could be done then. Was there discussion of protected minimum allocations for energy initiatives within this area?

Likewise, funding for household energy hardship. Was this something that was discussed in terms of talking about whether there would be a protected minimum that would go to funding for household energy hardship? We know there are so many families across New Zealand—no doubt in this part of New Zealand, as well—who at the moment are really struggling to pay their power bills. Would this be seen as something that is a priority for the trust?

Likewise, was there a discussion about whether there would be protected ring-fences for energy efficiency? What could we do to make our homes and our businesses more efficient, both from a cost perspective but also from a health perspective?

I’m lucky enough to live in a region of New Zealand where, when you put together with EECA’s Warmer Kiwi Homes, some homeowners can be in the position of not having to pay anything for their insulation upgrades because there are other organisations that come in and pay the difference. And we see the real health benefits of that. So was there a discussion of a ringfence for that?

Likewise with local resilience, we know that, when it comes to our lines infrastructure, those poles and wires are having to put up with more and more extreme weather events; it seems like every couple of months. Was there any discussion or advice around how the trust could be investing more to ensure that this region is more energy resilient, that it was able to withstand those storms that we know are happening particularly in this part of the world? Would that be a priority for investment, or how would that be decided?

Likewise, was there discussion about whether or not the trust could invest in generation and renewable generation? It’s quite a different business from what they’re currently doing, in terms of investing in poles and wires and electricity distribution, and traditionally we don’t see those two things coming together. The broadening of the trust’s objective would theoretically allow for the investment also in electricity generation, so I’d be interested to know whether, in terms of prioritisation, that was something that was discussed.

And, likewise, community energy projects: we know that community energy, and particularly community batteries, offers some real opportunities to communities up and down the country—no doubt in this part of the world as well—in terms of households being able to afford their power bills and offering ways in which people that don’t own the roof that sits above them—[Time expired] Madam Chair?

CHAIRPERSON (Maureen Pugh): Have you got more?

Hon Dr MEGAN WOODS: I’ll just finish this question. They don’t own the roof that sits above them. Has there been consideration of how there may be more that can be invested into that area—about how this will be prioritised—given that the bill is silent on it?

The bill broadens the trust’s purposes from narrowly defined energy-related activities to the wider concept of charitable purposes while preserving the trust’s focus on benefitting the people of the district. The Trust Horizon now holds assets worth more than $200 million; yet, under its current rules, it has found itself increasingly limited in the range of projects that it can support. Meanwhile, the communities of the eastern bay do face real challenges in areas such as housing, education, health, employment, environmental protection, and community wellbeing. This bill would allow the trust to respond to some of those needs. As I’ve said, it does have sizeable assets, over $200 million, but the trust is limited.

The member asked around the trustees and whether it was going to be defined in the legislation, around what may be in or what may be out for them to potentially want to invest some of the money in. I would say that the local trustees are elected to the board, and, on our side of the House, we are supportive of local members making local decisions in the best interests of local communities, and the local trustees are elected to that trust to make those decisions. If I think of one in my home patch of Tauranga, we have TECT, who do fantastic work. Again, they have local trustees elected to their board, who make informed decisions based on the proposals that are put to them, so I don’t think it would be appropriate for Wellington to set in legislation what is in and what is out. Ultimately, I trust the locally elected trustees to make the best decision possible.

I move, That debate on this question now close.

CHAIRPERSON (Maureen Pugh): I think there’s a little bit to go.

Kia orana. Thank you, Madam Chair. Can I first just acknowledge the member who’s in the chair on behalf of Dana Kirkpatrick, who was the member who’s seeing this bill through the Parliament. I guess it’s appropriate that it’s Mr Rutherford. He’s tangentially near the area that we’re talking about here, as is my colleague the Hon Jan Tinetti.

I want to look at recital (7) of the preamble. This is in relation to “Energy Related Purposes”, and it’s to do with the definition, basically, that’s outlined there. Now, the former teacher in me identifies that there is a proper noun in the legislation here, which is in relation to “the District of New Zealand’s energy resources”. It’s a proper noun, because it’s capitalised, whereas the small “d” district is elsewhere in the relevant clause.

Joseph Mooney: A teachable moment.

TANGI UTIKERE: Thank you, Mr Mooney. Thank you—any time. My question there is: why is it not just related to “New Zealand”? It might be that there’s a particular reason in energy sorts of spheres or circles why districts are required, but if we were to just relate it to “New Zealand’s energy resources”, how might that differ from simply not having the proper noun there?

I just have two other questions, and I’m happy to do them now, Madam Chair?

CHAIRPERSON (Maureen Pugh): Yes, please.

TANGI UTIKERE: OK. The second one is in relation to recital (7)(f) of the preamble, and this is in relation to when the beneficial use criteria would kick in.

It talks about the “Acquiring equity in the Company up to the maximum of 25% of the Issued Capital of the Company:” Now, of course, this is its own piece of legislation and so effectively anything that’s stated there in isolation could trump any other existing legislation because it should stand on its own merits. My question is why the threshold is there, where it has come from, and whether it is—and it might just be that it is contained elsewhere, in perhaps the deed or other documentation around this. When we’re talking about a ceiling of 25 percent, is it related to some other existence somewhere else, as opposed to having a specified amount outlined in the legislation itself?

Then my final question, Madam Chair, and picking up on the comment that you yourself made: there is reference here around how this bill will effectively curtail the ability for it to have to come back to Parliament. I think it’s recital 10(b) of the preamble, actually. It says, “This power will also allow for any further variations that may be required in the future without having to seek a further private Act and without requiring Parliament to consider the details …”, which I think is actually probably wise. However, the way in which that provision effectively kicks in is where the approval of the High Court is given. It’s not just saying that, in terms of seeking to change aspects of this, we’re going to take up Parliament’s time, but it provides an avenue to effectively mitigate or prevent the use of Parliament’s time by going through the High Court.

My question to the member is: is that the appropriate mechanism? I think it’s appropriate that there is a mechanism, but why is it that, effectively, a decree or a decision of the High Court is the appropriate—and there are many courts in this country; why it is that the High Court is the appropriate one?

I have a question for the member in the chair, Tom Rutherford, around recital 7(b) of the preamble, “Energy Related Purposes”, which states, “Improvements to the supply of electricity to the general public in rural or remote areas in the District by replacing inadequate or unreliable supply systems.” Horizon’s network, according to the Commerce Commission’s disclosures, collected $38 million in line-charge revenue in 2025, while its three-year average capital expenditure (CAPEX) on asset replacement and renewal—I would expect some of it is in rural or remote areas, but their average annual expenditure on CAPEX was only $6.6 million a year despite collecting $38 million in line-charge revenue. I’m interested in the claim that energy-related opportunities have been exhausted with an electricity network that, Horizon themselves say, continues to require substantial renewal and replacement.

The second question—I see the member’s taking advice—is that Horizon’s network have stated in their current price path that they’re embarking on a $225 million, 10-year investment programme, and they’ve separately sought to reopen its regulated price path for the $14.2 million Ōpōtiki upgrade. The Commerce Commission’s draft decision would allow another $4.9 million to be recovered from consumers. Did the trust or the promoter of this bill get any advice on whether any part of that project, the Ōpōtiki one as an example, or complementary reliability and consumer support projects could fall within the trust’s existing energy-related objectives? Given that the trust has $200 million, it has claimed, sitting in its bank account, that begs a number of questions. Have they not adequately invested in asset renewals and upgrades, in line with the needs of their asset over the period that this large amount of money has been accrued and that they pay dividends to the trust? That’s a question that needs to be asked and answered.

The second one is: given that energy-related purposes in the current trust legislation provides for them to fund improvements by replacing inadequate or unreliable supply systems, wouldn’t that fall squarely in the remit of upgrading assets, whether they be transformers or poles and lines, in accordance with that clause, all around rural and remote areas? Thank you.

Thank you, Madam Chair. Just coming back to a couple of questions that Tangi Utikere asked, he asked around energy-related purposes, meaning purposes which relate to some aspects of the beneficial use, application, or enjoyment in the District of New Zealand’s energy resources, and he highlighted the word “District”. The history of local trusts has been always to have a focus on local assets to local needs.

He asked around recital (7)(f), acquiring equity in a company up to a maximum of 25 percent. There is no maximum. This was addressed by the courts in 2000 through the legislation there.

There was a question around the word “District”, Mr Utikere—if I was in your classroom, I would address you that way, sir—around whether it was a capital “D” or a little “d”. Well, it’s defined in the trust deed in clause 1.1 and clause 6 and means “territory over which the Bay of Plenty Electric Power Board was authorised to supply electricity”, hence why that has a capital “D” in this case.

There was a question around “Why the High Court?” It’s because the High Court exercises jurisdiction over trusts, particularly charitable trusts.

To Mr Court’s question around why in the last year, I can’t remember the figures exactly off the top of my head, but there were significant—hundreds of millions of dollars and then only a few million. My understanding is that they have a completely separate entity that undertakes that work in rural and remote communities across the Eastern Bay of Plenty.

Just to follow up the question, for the member’s benefit, Horizon Networks collected $38 million in line-charge revenue in 2025, while its three-year average capital expenditure on asset replacement renewal was only $6.6 million a year. That is a very large difference in the amount of money they are collecting from customers versus what they’re spending on asset replacement and renewal. If there’s one thing the Infrastructure Commission has made clear and that parties across the House agree on, it’s that infrastructure operators should be spending at least 60c of every dollar that they spend on asset renewal and maintenance. The question for the member in the chair, Tom Rutherford, is: how can the claim be reconciled that energy-related opportunities have been exhausted when Horizon Networks itself says the energy network continues to require substantial renewal and replacement?

The second question, which I don’t believe I got a clear answer to, was: given the trust’s energy-related purposes recital (7)(b) is very clear that the trust can distribute money to replace inadequate or unreliable supply, particularly in rural or remote areas, it seems like there is a good case for the trust to do a better job of identifying, separately from Horizon Networks, a regulated price pathway in terms of recovering costs from consumers and making investments. The trust itself has an opportunity to make additional investments in asset maintenance and renewal outside of what Horizon Networks are doing. That has not been adequately explained through the committee stage, and it hasn’t been adequately explained to the House yet this evening.

Thank you, Madam Chair, and thank you to Simon Court for his questions. The lines company is a separate entity to the trust. The trust owns the shares in the lines company, but decisions about maintenance and upkeep of the assets are decisions for the company; they are not decisions for the trust. The trust can only spend their money for charitable energy-related purposes, upkeep of assets or the like, and not for the charity per se. For example, the $200 million that I talked about also is not funds that they hold in a bank account; it is largely the value of the electricity network.

I move, That debate on this question now close.

CHAIRPERSON (Maureen Pugh): I knew you would do that. No, I think there are some unanswered questions yet.

Thank you, Madam Chair. Carrying on from Simon Court’s excellent questions, which actually haven’t been addressed yet, the fact that this is a charitable trust that happens to also be a lines company is, I think, something that is well understood by everybody here. The whole point of contention at the select committee, and something that we want to probe a bit more in committee stage, is this question: have the energy-related expenditure opportunities been exhausted? It requires an answer of “yes” in order to say that therefore we should be funding different things. It is an absolutely pertinent question. I don’t think that has been adequately addressed. I can see the member Tom Rutherford is getting some more advice there.

It comes to where I started in terms of the contributions and questions I was making around the discussion document that the Ministry of Business, Innovation and Employment has out at the moment. This is a question that is being asked of all lines companies at the moment—exactly the question, Mr Court—in terms of the proportion of what has been collected from consumers, i.e., everyday New Zealanders who are struggling to pay their power bills, and what is being reinvested back into those networks to make sure they’re resilient.

The other further question I have for the member in the chair is: has the trust looked at non-network solutions? Often, we know that non-network solutions actually are going to provide more efficient, more affordable, and more resilient options for consumers. Non-network solutions—we get to a point where we don’t expect our lines companies to just build poles and wires, as they have for 100-odd years, but actually we start to see things like solar and batteries and more distributed energy systems as a far better alternative for some communities, particularly, many of the lines companies will tell me, when it comes to rural upgrades. This is particularly important when it comes to the area that this bill is discussing and whether or not that is something that has been considered.

If we can take the question back to its bare bones—and I would never purport to speak for Mr Court, but I think if we strip back the question that the committee is still wanting to know—it is: what evidence is there that the trust has exhausted all its energy-related opportunities for expenditure? We know that this is pretty much a limitless piece of string in terms of what needs to be invested across all of New Zealand, including the Bay of Plenty, that we’re discussing tonight. I think that’s what the committee is interested in hearing about.

I’m advised that there are not enough applications lodged, plus the trust goes out proactively to their community and they have expended all available income where they can, hence why they are seeking to broaden their remit. For example, 60 percent of the total houses in their district have been retrofitted for insulation already, and under the current parameters, as set out in the legislation that it is working in at the moment, they are confined to how they can spend the income that the trust has at present.

Hon Dr Megan Woods: Madam Chair.

CHAIRPERSON (Maureen Pugh): Is this new material?

Hon Dr Megan Woods: No, it’s a follow-up question for the answer the member just gave.

CHAIRPERSON (Maureen Pugh): The Hon Dr Megan Woods.

The member Tom Rutherford has just told us that they have gone out and they have proactively looked for opportunities for expenditure and that they’ve left no stone unturned. I appreciate the position the member is in, but it does go back to Mr Court’s question. This is an organisation that collected $36 million. I think $36 million was the number, Mr Court, that they collected from consumers in this area last year. Have they really exhausted all their opportunities if they’re still continuing to collect $36 million from consumers in that area? Why haven’t other alternatives been looked at?

The trust doesn’t collect any money from consumers.

CHAIRPERSON (Maureen Pugh): Unless there’s new material, we are moving on.

I really do think that that is an unanswered question. I think we’re dancing on the head of a pin when we’re talking about the difference between the trust and the lines company. This was established under the energy Act, but nevertheless, we will move on because there are other questions. Those questions are around how different communities are going to be represented in terms of these decisions. These are quite different decisions that will be being made. They’re not all going to be energy-related.

So how will that community representation come in on a trust—that’s my first question. How will iwi and local residents be represented when it comes to this new bigger basket of funding opportunities that the trust can look at? Will local residents and iwi have a formal role in terms of making those decisions? Earlier, when I asked the member about how it was and whether there were going to be protected minimums, I think there was a little bit of misunderstanding. I wasn’t for a moment saying that it should be prescribed in the legislation. I can see it’s not in the legislation before us. My question was to whether there had been advice. This is in the same vein. I know it’s not in the legislation, but I would expect that the member who brought the bill would have asked some questions around the decision making and the governance of this and both how those grant decisions will be made and how they will be made transparent.

The other is—because this is covering a relatively broad geographic area in terms of the area it covers—what is going to be done to ensure that there’s geographic equity? We’re not just talking about energy-related decisions now. When we were talking about energy-related decisions, there were very prescribed pathways that needed to be decided. What was needed where was far more obvious in terms of the needs of a particular community in terms of its distribution business, but when it comes to now looking at distributing this money to community groups and sports clubs and other charitable purposes, how will the trust and the board that it is elected to make decisions about energy? What will be put in place to ensure that they are ensuring that all the communities who fall under the rohe of this trust deed—how will they be protected and looked after in here?

The member asked around how the communities in and amongst the district will make sure that, effectively, they get their fair share of the pie. There are six trustees on the trust. There are three wards—two from the Whakatāne ward, one from Ōpōtiki, and one from Kawerau. Those four elected trustees then subsequently appoint two other trustees to the board to make up the total six. They each have their geographical spread from across their communities, but they will ultimately consider all of the applications that are before them to make those decisions. None of the other trusts across the rest of the country are specified in legislation from Parliament that says, “You must divvy it up to this part here and that part there and this part here of the district.” Those decisions are best made by the locally elected trustees who know their communities better than anybody else.

I move, That debate on this question now close.

A party vote was called for on the question, That debate on this question now close.

Ayes 67

New Zealand National 48; ACT New Zealand 11; New Zealand First 8.

Noes 55

New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 4; Ferris; Kapa-Kingi.

Motion agreed to.

Preamble agreed to.

Committee of the whole House

Clause 1 Title

CHAIRPERSON (Maureen Pugh): Members, we come now to clause 1, which is the title. The question is that clause 1 stand part.