Consultations

The Authority is proposing to decline an application by Transpower New Zealand Limited (Transpower) for an exemption from the obligations in clauses 8 to 26 of Schedule 12.4 of the Electricity Industry Participation Code 2010 (the Code).

The exemption would allow Transpower to categorise certain connection assets as interconnection assets for the purposes of applying the Transmission Pricing Methodology (TPM). The application arises from Transpower's decision to stage the commissioning of NAaN (North Auckland and Northland) project. Assuming that Vector Limited (Vector) completes the required connections, as each relevant NAaN asset is commissioned, that asset will be categorised as a connection asset until the project is commissioned in its entirety (at which point each NAaN asset will become an interconnection asset).

The Authority proposes to decline the application as it does not satisfy the requirements in section 11(2) of the Electricity Industry Act 2010 (Act) for granting exemptions. Granting the exemption would not appear to be consistent with achieving the Authority’s statutory objective under section 15 of the Act. Treating the assets as interconnection assets over the interim period would mean grid users generally would be charged for those assets when it is only Vector that is connected to the relevant assets and Vector’s customers that benefit.

Transpower has requested the opportunity to provide additional information to potential submitters on this consultation paper, setting out the rationale for their decision to use a staged approach to the asset commissioning (the staged approach was not envisaged when the project was approved by the Electricity Commission). This additional information is provided below.