The Authority has decided on new guidelines for transmission pricing.

Our decision and the new guidelines have been informed by comprehensive engagement with industry and interested parties.

The Authority considers the new guidelines will deliver significant benefits to consumers and support New Zealand’s transition to a low carbon economy.

Transmission pricing matters. Transmission charges pay for the national grid and make up approximately 10 percent of the average consumer’s total power bill. The transmission grid is a crucial aspect of our electricity system.

The core components of our decision and the new TPM guidelines are consistent with those outlined in our 2019 TPM proposal.

We have removed the regional coincident peak demand (RCPD) charge and the high voltage direct current (HVDC) charges and replaced them with two new main charges:

  • benefit-based charges – investments paid for by customers who benefit
  • a residual charge to recover overheads and remaining costs – in a way that does not distort customer decisions on grid use and investment.

The new guidelines will contribute to a more efficient electricity industry for the long-term benefit of consumers. The new approach will:

  • Reduce the cost of electricity at peak times when consumers value it most.
  • Encourage the right investment in renewable generation and transmission to respond to the electrification of transport and industrial processes.
  • Contribute to a low emissions economy at the least cost to consumers.

The new guidelines rebalance transmission charges, they will not increase charges overall. The guidelines include a cap on charges to protect consumers and directly connected businesses from big price increases.

Transpower will now develop a proposed new Transmission Pricing Methodology in line with the new guidelines and relevant sections of the Electricity Industry Participation Code 2010.

We expect a revised Transmission Pricing Methodology will be in place by April 2023.

The decision paper, new guidelines, and a summary factsheet are published below. The model of the indicative impact on transmission charges is published here.