When the new transmission pricing methodology (TPM) comes into force on 1 April 2023, Transpower’s existing method for allocating settlement residue (or loss and constraint excess) will become obsolete. Following consultation the Authority has decided to amend the Code to provide for the development of a new Settlement Residual Allocation Methodology (SRAM), based on the simple method for the benefit-based charge in the TPM. The Authority has also introduced requirements for distributors to pass through settlement residue to their customers.  The Code amendment will come into effect on 1 April 2023.

We believe this method best aligns with the Authority’s statutory objective by improving the efficient operation of the electricity industry and promoting competition.