TPM decisions
All decision documents, consultation documents, submissions and cross-submissions for past consultations are below.
Decision on the review of connection asset replacement costs
We have now published our decision on the first review and updates of the replacement costs we will use to calculate connection charges under the new TPM. We have decided to update all the connection asset replacement costs in line with estimates provided by Jacobs and as proposed in the consultation paper. We will use the updated replacement costs to calculate connection charges from the pricing year beginning April 2023.
Decision documents
- TPM Decision: Review of connection asset replacement costs
- Connection asset replacement costs comparison
Consultation process
The consultation period was 2 weeks commencing Thursday, 28 July 2022. Submissions were due by 5pm Thursday, 11 August 2022. This was followed by a 1-week period for cross-submissions. We received four submissions and two cross-submissions, which we considered in reaching our decision.
The TPM requires Transpower periodically review (including updating as appropriate) the connection asset replacement costs - before the start of the first pricing year under the new TPM and no later than five years after the first pricing year. Most of the connection asset replacement costs have not been updated for many years.
We commissioned Jacobs to provide independent expert advice on updated estimates of the connection asset replacement costs. Jacobs’ report confirms our expectation that most of the current connection asset replacement costs are under-valued and the relativity between them has changed.
The independent report was included as part of the consultation package, as is an excel spreadsheet of the current and proposed new connection asset replacement cost estimates (see below). We also published a more detailed overview of how connection charges are calculated and the role the connection asset replacement costs play, which we recommend reading.
Consultation documents
- TPM consultation paper on connection asset replacement costs - 28 July 2022
- Jacobs report on connection asset replacement costs - July 2022
Building block cost comparison for connection asset replacement costs consultation - July 2022 [ xlsx 192.07 KB ]- Information sheet on connection charges - July 2022
Submissions
 Nova submission on replacement costs consultation 11 August 22 [ pdf 360.58 KB ] |
| Electra submission on replacement costs consultation 11 August 22 [ pdf 83.98 KB ] |
| Meridian submission on replacement costs consultation 11 August 22 [ pdf 151.92 KB ] |
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Cross-submissions
| MEUG cross-submission on replacement costs consultation 18 August 22 [ pdf 127.88 KB ] |
| Vector cross-submission on replacement costs consultation 18 August 22 [ pdf 155.54 KB ] |
Decision on the reclassification of Buller region assets
We have now published our decision on the reclassification of Buller region assets as connect assets, instead of interconnection assets, under clause 23 of the new TPM. We have decided to reclassify the following affected assets as connection assets from 1 April 2023:
- The IGH-WPT B transmission line (110kV double circuit towers), including tower 90 but excluding tower 26 and the circuits between IGH and tower 26
- The IGH-WMG A transmission line (110kV single circuit towers)
- The WMG-WPT A transmission line (110kV single circuit poles)
Our decision document outlines why we consider the Affected Assets provide transmission services of a type and nature typically provided by connection assets, and do not provide material transmission services of a type and nature typically provided by interconnection assets.
Decision document
Consultation process
The consultation period was 2 weeks and began Thursday, 23 June 2022. Submissions were due by 5pm Thursday, 7 July 2022. Cross-submissions were due by 5pm Thursday, 14 July 2022. We received one submission and one cross-submission, which we considered in reaching our decision.The consultation was on the proposal to reclassify certain assets in the Buller region as connection assets under clause 23 of the TPM.
Consultation document
Submission
| Buller Electricity submission on proposed reclassification of Buller region assets 7 July 22.pdf [ pdf 185.11 KB ] |
Cross-submission
| Buller Electricity Power Trust cross-submission on proposed reclassification of Buller region asset 14 July 22 [ pdf 94.79 KB ] |
Determination of the starting customer allocations for the Clutha Upper Waitaki Lines Project (CUWLP) benefit-based investment (BBI)
We have now published the starting customer allocations for the CUWLP BBI under the new TPM. Along with its covered costs, the starting customer allocations are an input to calculating CUWLPs benefit-based charges.
As required by the new TPM we have calculated customer allocations we consider are broadly proportionate to the positive net private benefit each customer is expected to derive from CUWLP, taking into account a reasonable range of possible futures.
Determination documents
The determination package on the starting customer allocations for the CUWLP BBI includes:
- TPM Determination: CUWLP starting BBI customer allocations - Decision Paper
- TPM Determination: CUWLP starting BBI customer allocations - Record of applications of the BBC standard method
- CUWLP starting BBI customer allocations post-processing model
- Chapman Tripp CUWLP assurance letter
- KPMG CUWLP assurance opinion
- EY CUWLP management summary report
Consultation process
The consultation period was 4 weeks, and began Tuesday, 17 May. Submissions were due by 5pm Tuesday, 14 June 2022. Cross-submissions were due by 5pm on Tuesday, 21 June 2022. We received nine submissions and six cross-submissions. Feedback received reinforced there is no single ‘right’ answer to who privately benefits from CUWLP over the 20-year calculation period, or the relative benefits to each beneficiary.
This consultation was on the proposed starting benefit-based investment (BBI) customer allocations for the Clutha and Upper Waitaki Lines Project (CUWLP), which we have calculated under the new Transmission Pricing Methodology (TPM) the Electricity Authority announced on 12 April 2022.
Consultation package
The CUWLP BBI consultation package includes:
- Part A: Consultation Paper [ pdf 1.19 MB ]
(Please note paragraph 52 was corrected on 27 May 2022 to clarify that North Island customer groups have been treated as one group) - Part B - Application of the price-quantity method to CUWLP BBI: proposed starting customer allocations
- Part C: Technical assurance
- Part D: Legal assurance
- Part E: The post-processing model used for CUWLPs proposed starting BBI customer allocations [ xlsm 3.2 MB ]
- Part F: A summary of modelling data outputs and inputs from the wholesale market model [ xlsx 9.34 MB ]
Submissions
| ENA submission on proposed CUWLP customer allocations v2 15 June 22 [ pdf 274.64 KB ] |
| Manawa submission on proposed CUWLP customer allocations 14 June 22 [ pdf 272.68 KB ] |
| Mercury submission on proposed CUWLP customer allocations 14 June 22 [ pdf 154.7 KB ] |
| Meridian submission on proposed CUWLP customer allocations 14 June 22 [ pdf 92.96 KB ] |
| MEUG submission on proposed CUWLP customer allocations 14 June 22 [ pdf 140.35 KB ] |
| Northpower submission on proposed CUWLP customer allocations 14 June 22 [ pdf 699.66 KB ] |
| Southern Generation submission on proposed CUWLP customer allocations 14 June 22 [ pdf 455.67 KB ] |
| Unison submission on proposed CUWLP customer allocations 14 June 22 [ pdf 127.35 KB ] |
| Vector submission on proposed CUWLP customer allocations 14 June 22 [ pdf 134.91 KB ] |
Cross-submissions
Online drop-in session
On 25 May we hosted an online drop-in session for stakeholders to ask questions and seek clarifications about the consultation. The session was recorded and transcribed [ pdf 214.32 KB ] for interested parties unable to attend on the day. The session slides [ pdf 2.53 MB ] are also available.
More information
Under the new TPM, certain capex and opex costs of a BBI (the BBIs covered cost) must be recovered by Transpower from beneficiary customers through benefit-based charges (BBCs). CUWLP is considered a high value post-2019 BBI under the new TPM. As such, we have used the price-quantity method to determine beneficiary customers and calculate their starting BBI allocations. The price-quantity method is one of two standards methods for high-value BBIs, as outlined in the first edition of the BBC assumptions book.
The starting BBI customer allocations for CUWLP are an input into calculating customer benefit-based charges (BBCs). A customer’s starting BBI customer allocation is equal to the positive net private benefit (EPNPB) expected to accrue to the customer from CUWLP, if any, as a percentage of total EPNPB across all customers. We have used the price-quantity method because its primary investment need is to alleviate, or prevent, transmission constraints that are expected to exist in the wholesale electricity market if CUWLP did not occur.
CUWLP was approved by the Electricity Commission in 2010 as part of the Lower South Island Renewables Investment. Transpower announced its decision to proceed with CUWLP in June 2020. CUWLP was effectively fully commissioned in April 2022. In TPM terms, this means CUWLP’s expected effective full commissioning date occurred in the financial year (FY) 2021/22. CUWLP is a post-2019 BBI that is expected to be high value when fully commissioned.
We published an initial case study application of the price-quantity method to CUWLP as part of our 30 June 2021 TPM proposal. The starting BBI customer allocations and BBCs in that case study were indicative only and subject to change. The proposed starting BBI customer allocations we are now consulting on have been calculated in accordance with the TPM as approved by the Electricity Authority.
Determination of first edition of the benefit-based charges (BBC) Assumptions Book
We have now published the first edition of the BBC Assumptions Book (v1.0).
The purpose of the assumptions book is to outline the assumptions and detailed methodologies Transpower intends to apply for allocating and adjusting BBCs (calculating starting BBI customer allocations for post-2019 BBIs and adjusting BBCs).
The assumptions book covers both standard methods (price-quantity method and resiliency method) and the simple method for calculating starting BBI customer allocations for post-2019 BBIs. We have taken a relatively detailed approach to provide greater (up-front) certainty about how BBCs will be allocated and adjusted under the new TPM.
The assumptions book is a living document that will be updated from time to time. We expect to consult on an update to the assumptions book in late January 2023, to propose adding the BBC simple method’s benefit factors into the book’s Chapter 5.
Determination documents
The determination package on the first assumptions book contains:
- TPM Determination: BBC Assumptions Book v1.0 - Decision Paper
- TPM Determination BBC Assumptions Book v1.0
- Simple BBI customer and regional allocations model
- Chapman Tripp assumptions book assurance letter
- KPMG assumptions book assurance opinion
- EY assumptions book management summary report
Consultation process
The consultation period was 4-weeks. Submissions were due by 5pm on Friday, 27 May 2022. This was followed by a 1-week period for cross-submissions. Cross-submissions were due by 5pm on Friday, 3 June 2022. We made changes to the assumptions book as a result of some of the feedback.
Consultation documents
The draft assumptions book consultation package included:
- Part A: The draft assumption book consultation paper [ pdf 1.22 MB ]
- Part B: The draft assumption book [ pdf 3.22 MB ]
- Part C: Technical assurance on technical aspects of the Assumptions Book (draft for consultation)
- from KPMG [ pdf 116.88 KB ]
- from Ernst and Young [ pdf 212.94 KB ]
- Part D: Legal assurance on the compliance of the Assumptions Book (draft for consultation) with the new TPM
- from Chapman Tripp [ pdf 2.29 MB ]
- Part E: Supporting information: Simple method customer allocation model [ xlsx 2.9 MB ]
- The model includes the simple method factors (SMF), regional net private benefit (RNPB), demand adjustment factors (IF) and proposed customer allocation (CA) values for the first simple method period.
- Part F: Supporting information: Arc flow data
- This is the data that was used by Transpower in order to determine the modelled regions for the first simple method period.
Arc-flow_file1 [ csv 134.94 MB ]- Arc-flow_file2 [ csv 134.88 MB ]
- Arc-flow_file3 [ csv 135.76 MB ]
- Arc-flow_file4 [ csv 136.14 MB ]
- Arc-flow_file5 [ csv 135.76 MB ]
- Arc-flow_file6 [ csv 9.06 MB ]
- Arc-flow_file7 [ csv 33.35 MB ]
Arc-flow_file8 [ zip 43.37 MB ]
Submissions
| Electra Limited submission draft assumptions book 27 May 22.pdf [ pdf 2.5 MB ] |
| Manawa submission draft assumptions book 27 May 22.pdf [ pdf 319.76 KB ] |
| Mercury submission draft assumptions book 26 May 2022.pdf [ pdf 207.74 KB ] |
| Meridian submission draft assumptions book 27 May 22.pdf [ pdf 277.39 KB ] |
| MEUG submission draft assumptions book 27 May 22.pdf [ pdf 140.34 KB ] |
| Northpower submission draft assumptions book 27 May 2022.pdf [ pdf 144.81 KB ] |
| Southern Generation Limited Partnership draft assumptions book 27 May 22.pdf [ pdf 520.07 KB ] |
| Vector submission draft assumptions book 27 May 22.pdf [ pdf 175.9 KB ] |
Cross-submissions
| Electra cross-submission draft assumptions book 3 June 22 [ pdf 118.08 KB ] |
| Manawa cross-submission draft assumptions book 3 June 22 [ pdf 211.44 KB ] |
| MEUG cross-submission draft assumptions book 3 June 22 [ pdf 165.78 KB ] |
| Vector cross-submission draft assumptions book 3 June 22 [ pdf 176.85 KB ] |
Online drop-in session
On Friday, 6 May at 1:30pm we hosted an online drop-in session. It was an opportunity for stakeholders to ask questions and seek clarifications about the consultation and the draft assumptions book itself. The session was recorded and transcribed [ pdf 157.86 KB ] for interested parties unable to attend on the day.
More information
On 12 April 2022, the Electricity Authority (Authority) announced its decision to adopt a new TPM, to take effect in prices for the year commencing 1 April 2023 (Pricing year 2023/24). The Authority’s decision paper and the new TPM are available on its website.
The new TPM contains the structural and fundamental aspects of the new transmission pricing regime. It also includes a role for secondary documentation to help ensure consistent and transparent application at an operational level. Under the new TPM’s requirements for BBCs, Transpower must develop, consult on and publish an assumptions book.
The first edition of our assumptions book contains assumptions and detailed methodologies Transpower intends to apply for allocating and adjusting BBCs (calculating starting BBI customer allocations for post-2019 BBIs and following a BBC adjustment event). It takes a relatively detailed approach, intended to provide greater (up-front) certainty about how BBCs will be allocated and adjusted under the new TPM.
It will be a living document that is updated as inputs change (e.g. if MBIE update its Electricity Demand and Generation Scenarios) and as Transpower and stakeholders gain experience with the allocation and adjustment of BBCs. It will be non-binding, except as otherwise stated in the new TPM.
Where Transpower proposes to depart materially from the assumptions book we will explain and consult on this when we consult on our application of the relevant BBC allocation or adjustment methodology. We may not deviate from the Assumptions Book in any way that does not comply with the new TPM or wider Code.
The assumptions book will be consistent with the TPM and all aspects of the Code. It is not intended to replicate, and cannot change, the fundamental and structural requirements for allocating or adjusting BBCs, which are specified in the new TPM itself.
