The transmission pricing methodology (TPM) ensures that Transpower can recover the full economic costs of its services.
Although the Commerce Commission is responsible for setting Transpower’s total regulated revenue requirements, we are responsible for approving the methodology by which Transpower apportions those revenue requirements among its transmission customers.
The current transmission pricing methodology was approved by the Electricity Commission in 2007 and was adopted into the Code when this was established in 2010. We approved updates to the methodology in 2017 after Transpower undertook an operational review of the TPM in 2014.
The transmission pricing methodology describes:
- connection charges, which recover part of Transpower's alternating current (AC) revenue - this is a forecast of the revenue required to recover Transpower’s costs of providing alternating current transmission services during the pricing year by reference to the cost of providing connection assets
- interconnection charges, which recover the remainder of Transpower's alternating current revenue
- high voltage direct current (HVDC) charges, which recover Transpower's high voltage direct current revenue
- how the costs of transmission alternatives services are charged and recovered, if and when transmission alternatives services are provided and/or funded by Transpower
- practical ways to facilitate greater transparency in relation to Transpower’s prudent discount policy, which helps to ensure that the transmission pricing methodology does not provide incentives for inefficient by-pass of the existing grid.
The current Transmission Pricing Methodology can be found in Schedule 12.4 of the Electricity Industry Participation Code.
The Authority published new transmisssion pricing guidelines on 10 June 2020. Transpower will now develop a proposed new Transmission Pricing Methodology in line with the new guidelines and relevant sections of the Electricity Industry Participation Code 2010.
We expect a revised Transmission Pricing Methodology will be in place by April 2023.
Any questions regarding the current Transmission Pricing Methodology should be directed to Transpower.
Guidelines for Transpower - Transmission Pricing Methodology
Last updated: 12 October 2020
Published: 17/12/2013 12:00am
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