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26 November 2019
Welcome to Market Brief, the Electricity Authority’s weekly update on regulatory and market developments.

Contents

TPM process update
The Authority is currently considering the submissions and cross-submissions it received on the Transmission Pricing Methodology: 2019 Issues Paper. We appreciate the time and effort stakeholders have invested in providing their views.

The purpose of this update is to explain our thinking on the process and in particular further engagement with stakeholders from this point.
While the Authority is still considering the final shape of the new TPM guidelines, the submission process has confirmed to us that:
  • the case for changing the Transmission Pricing Methodology is clear
  • there are a number of issues on which no consensus will be reached, for example the treatment of historic assets
  • there is a need to conclude the debate.
The Authority expects to engage with submitters in a range of ways, as we work towards making final decisions on the TPM guidelines: In the new year the Authority is likely to:
  • engage further on the cost benefit analysis, acknowledging stakeholders will wish to understand the Authority’s thinking on the concerns raised in two expert reports. The Authority is confident that changing the TPM guidelines will result in significant benefits to consumers, given the inefficient incentives for consumption and investment created by the current RCPD charge
  • engage further on the peak charge issue to support efficient grid use and transmission investment. We acknowledge stakeholders’ concerns about the potential implications from removing the RCPD charge, and instead relying on nodal prices, and any transitional peak charge proposed by Transpower. The Authority agrees this transition needs to be carefully considered
  • undertake further technical consultation on specific aspects of the proposed TPM guidelines.
At this point, we consider targeted engagement will be a more effective way to progress the TPM guidelines than a full conference (as suggested by some submitters).

We are targeting a final decision on the TPM guidelines in the second quarter of 2020.

Amendment to the Top Energy and Ngawha Generation Exemption under Part 3 of the Act

We have decided to grant an amendment to Top Energy Limited and Ngawha Generation Limited (NGL) for their existing exemption to comply with rule 9 and rule 10 of Schedule 3 of the Electricity Industry Act 2010. 

This amendment is for two clauses of the principal exemption and makes the following changes:

  1. increases the nameplate capacity of Ngawha Springs Power Station to 75MW
  2. extends the exemption to end at the same time as the NGL’s resource consent, to the close of 31 July 2052.

All other conditions of the original exemption still apply.

We received no submissions or comments in response to the draft decision paper and have published the final decision on our website.

The Authority and EPR
The Authority is taking deliberate and planned action on the Electricity Price Review’s recommendations.

There is strong alignment between the Government’s response and the Authority’s existing work programme. We know we can work more quickly, and we know we can engage differently with our stakeholders to ensure our policies and actions are for the long-term benefit of consumers.

In the past month, we’ve published the saves and win-backs consultation paper, the hedge market enhancements market making discussion paper and a technical consultation paper on two revisions to the Authority’s April 2019 Quick Wins for Increasing Access to Electricity Services paper. All of these projects relate to EPR recommendations. 

The Authority’s response extends beyond our existing work programme and a full EPR programme of work is being developed for Board consideration in December. The programme will be published in early 2020. 

Any questions about the Authority and EPR, please email EPR@ea.govt.nz.

Current consultations

Hedge Market Enhancements market making discussion paper

Ending: 02/12/19 5.00pm
Read more

Integrating hosting capacity into Part 6 of the Code

Ending: 03/12/2019 5.00pm
Read more

Saves and win-backs Code amendment consultation paper 2019

Ending: 03/12/2019 5.00pm
Read more

2020/21 Levy-funded appropriations

Ending: 03/12/2019 5.00pm
Read more

Switch Process Review - Issues with the ICP switching processes and possible options to address these issues

Ending: 17/12/2019 5.00pm
Read more

Consultation calendar

View our high-level consultation calendar
Level 7, Harbour Tower, 2 Hunter Street, PO Box 10041, Wellington 6143, New Zealand
Tel: + 64 4 460 8860   Email: info@ea.govt.nz
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