Consultations

The Authority is proposing to amend the Code to make it clear that payments by distributors to eligible distributed generation for avoided cost of transmission (ACOT) are no longer required.

The proposed changes are consistent with the new transmission pricing methodology (TPM), and work with it to deliver significant benefits to consumers and support New Zealand’s transition to a low-emissions economy. The Authority considers that the current ACOT payments are inefficient. They lead to transmission costs shifting between regions, without significantly reducing transmission investment by Transpower. Removing ACOT payments would:

• Reduce the overall cost of electricity for consumers – ACOT payments cost consumers around $35m in the 2021 pricing year
• Promote competition by levelling the playing field between distributed generation, grid-connected generation and other grid support options for Transpower.

The consultation presents two options:

• Removing all provisions for ACOT payments from April 2023 (the Authority’s preferred option) or
• Phasing out the ACOT payments over the next two pricing years.

The consultation period was from 16 September to 3 November 2022. Thank you to everyone who made a submission.

Update: Following receipt of cross-submissions, the Authority put further questions to Transpower, as Grid Owner, on 4 November 2022 seeking to better understand its view on specific aspects of the consultation paper and selected submissions regarding grid reliability.

The Authority considers that Transpower is uniquely placed to express a view on this matter.

Transpower responded on 10 November 2022. To ensure that it has all relevant viewpoints before it, the Authority now welcomes any feedback from interested parties on Transpower’s response below. Please provide any feedback to network.pricing@ea.govt.nz by 4pm on Friday, 25 November 2022.

The consultation documentation, and the initial submissions and cross-submissions received, can be accessed below

If you would like to get in touch with the Authority with questions on this consultation please contact network.pricing@ea.govt.nz