Transmission Pricing Review: update and process
The Authority has decided to adopt the following approach for the transmission pricing review:
- to publish a consultation paper in January 2012 to seek industry and consumer feedback on the Authority's proposed economic and decision making framework for transmission pricing; and
- to progress the transmission pricing review as two parallel work streams:
- considering changes to the transmission pricing methodology (TPM) that would be consistent with consumers' long-term interests; and
- considering introducing a static reactive compensation (SRC) component into the TPM.
The Authority recognises that transmission pricing can have significant cost implications for consumers and participants, including the state-owned electricity generators subject to the Government's proposed asset sales programme. Accordingly the Authority considers it is of value to parties to understand the basis on which the Authority proposes to make decisions about transmission pricing.
Should the Authority decide to make changes to the TPM, any changes will be made clear when the Authority publishes Guidelines for the TPM. Under the indicative timeframe, this is scheduled for September 2012.
The Authority's decision on the transmission pricing review process follows consideration of work by the Electricity Commission, the Authority's Transmission Pricing Advisory Group (TPAG) and industry and consumer submissions. TPAG was unable to reach a consensus on key aspects of transmission pricing and in the Authority's view there remain substantive transmission pricing issues that require further consideration and consultation.
The Authority therefore intends to release a consultation paper on the proposed economic framework in January 2012.
TPAG provided a recommendation for the treatment of static reactive compensation (SRC) and the Authority has decided to progress this proposal separately from the main review. The Authority will publish an Issues Paper and Draft Guidelines on SRC in March 2012.
Further details on the process and next steps in the review are available at: