The Authority has decided to adopt the following approach for the transmission pricing review:

The Authority recognises that transmission pricing can have significant cost implications for consumers and participants, including the state-owned electricity generators subject to the Government's proposed asset sales programme. Accordingly the Authority considers it is of value to parties to understand the basis on which the Authority proposes to make decisions about transmission pricing.

Should the Authority decide to make changes to the TPM, any changes will be made clear when the Authority publishes Guidelines for the TPM. Under the indicative timeframe, this is scheduled for September 2012.

The Authority's decision on the transmission pricing review process follows consideration of work by the Electricity Commission, the Authority's Transmission Pricing Advisory Group (TPAG) and industry and consumer submissions. TPAG was unable to reach a consensus on key aspects of transmission pricing and in the Authority's view there remain substantive transmission pricing issues that require further consideration and consultation.

The Authority therefore intends to release a consultation paper on the proposed economic framework in January 2012.

TPAG provided a recommendation for the treatment of static reactive compensation (SRC) and the Authority has decided to progress this proposal separately from the main review. The Authority will publish an Issues Paper and Draft Guidelines on SRC in March 2012.

Further details on the process and next steps in the review are available at:

The Authority has decided to adopt the following approach to distribution pricing to:

The Authority will release further information on its intended approach and criteria to assess alignment with the Distribution Pricing Principles and Information Disclosure Guidelines early in 2012.

Information on the Distribution Pricing Principles and Information Disclosure Guidelines is available at:

The Board has approved a new Part 10 of the Code and it is expected to be signed later this week. The new part 10, and consequential amendments to Parts 1, 11 and 15 of the Code will be gazetted in the new year.

The Board also approved the effective date for the new Part 10 to be 6 June 2013. A Part 10 implementation project will commence with an industry forum in February 2012. Details of the forum will be provided in January 2012.

A Part 10 companion paper and a summary of submissions will also be published in the New Year.

Further information about the Part 10 Review Project is available at:

The Authority has approved an urgent Code amendment, which will be gazetted on 22 December and take effect the next day. The Code amendment will restore the effectiveness of the resolution process when high spring washer prices occur on parallel lines.

Further information is available at:
http://www.ea.govt.nz/our-work/programmes/market/pricing-process-improvement/

The Gazette notice and Code amendment will be available at this link on 22 December 2011:

The Authority has published location factor and average price reports. The location factors are calculated for each node in the North Island referenced to OTA2201 and each node in the South Island referenced to BEN2201.

These reference nodes coincide with the reference locations for New Zealand electricity futures traded on the Australian Securities Exchange (ASX).

This location factor information was produced in response to requests by parties interested in the location factor variations between various nodes and the futures reference nodes.

The Authority is calling for nominations for four members for the Security and Reliability Council (SRC).

The SRC provides independent advice to the Authority on reliability of supply issues and on the performance of the electricity system and the system operator.

Two of the nominations are sought due to resignations and the Authority acknowledges the contribution provided by the resigning members: Tim Lusk and Roger Sutton. The other two nominations are sought due to expiry of the initial one-year terms.

Three appointments will be for 3 year terms and the fourth appointment will be for 2 years.

The Authority intends to appoint the new members by 31 March 2012, prior to the first meeting for the year in April. Although the Authority has the ability to re-appoint existing members, its policy is to seek nominations for all SRC and advisory group appointments.

Nominations should be emailed to info@ea.govt.nz, with 'Nomination for SRC members' in the subject line by 4.00 pm on Tuesday, 31 January 2012.

More information about the SRC including Terms of Reference is available at:

The Electricity Authority has calculated the reconciled levy rates for the first 8 months of the Authority's operations, from 1 November 2010 to 30 June 2011, in accordance with regulation 11 of the Electricity Industry (Levy of Industry Participants) Regulations 2010.

The levy rates will be gazetted on Thursday 22 December 2011 and are available on the Authority website at:

On 21 November 2011, the Authority published an information paper that analyses the costs and benefits of tighter market-making arrangements for New Zealand electricity futures traded on the Australian Securities Exchange.

This is a reminder that the Authority invites feedback on this cost-benefit analysis by 17 January 2012. The information paper is available at:

The latest Compliance Update is available at:

The Code Amendment Spreadsheet, updated as at 15 December 2011, is available at:

Papers for the Retail Advisory Group (RAG) meeting held on 16 December are available at:

The Board, chief executive and staff of the Authority would like to take this opportunity to thank all those who have participated in the Authority's work in many valuable and different ways during the first year of operations.

We wish you season's greetings and a happy, relaxing and safe holiday with family and friends, and look forward to continuing our association in 2012.