Pricing and cost allocation

This programme covers initiatives to promote efficient pricing in markets and for monopoly services. This programme aligns with our improve price signals strategy.

Current projects

  • Transmission Pricing Review

    The Electricity Authority's transmission pricing (TPM) review is a wide-ranging review of options for the allocation methodology for transmission costs.

    Latest Activity: 16 May 2019 Release of joint report: Beneficiaries-pay in USA

  • Distribution Pricing Review

    The Electricity Authority is consulting on the implications of evolving technologies (including batteries, electric vehicles, solar panels and smart meters) for distribution pricing arrangements.

    Latest Activity: 8 Apr 2019 Authority welcomes ENA future networks plan

  • Spot market settlement on real-time pricing

    We propose to develop a dispatch-based real-time pricing option to deliver more certainty, accuracy and efficiency.

    Latest Activity: 2 Apr 2019 Public briefing for consultation on remaining elements of real-time pricing

  • Removing constrained-on payments for generation ramping down

    Latest Activity: 26 Mar – 30 Apr 2019 Removing constrained on payments for generation ramping down

  • ACOT Code change implementation

    The Electricity Authority will decide which existing distributed generation will receive avoided cost of transmission (ACOT) payments under the regulated terms in Schedule 6.4 of the Electricity Industry Participation Code 2010 (Code) based on the advice

    Latest Activity: 5 Feb 2019 List of distributed generation eligible to qualify to receive ACOT in the upper North Island and upper South Island

  • Making price forecasts more accurate

    We have published a decision paper which sets out our decision to improve conforming load forecasts under existing incentive arrangements.

    Latest Activity: 7 Aug 2018 Evaluating options to improve the system operator load forecast

  • Wind Generation Offers

    The Wholesale Advisory Group has undertaken an investigation into the wind offer regime and found that there are likely to be net benefits in applying a targeted solution to address two problems.

    Latest Activity: 24 Apr 2018 Decision papers on wind offer arrangement

  • Review of instantaneous reserve event charge and cost allocation

    The Authority is reviewing the instantaneous reserve event charge and allocation of availability costs. It has asked the WAG to consider the extent to which the existing arrangements meet the statutory objective and make recommendations to the Authority.

    Latest Activity: 16 – 16 May 2017 WAG recommendations paper: Instantaneous Reserve Event Charge and Cost Allocation

  • Review of Part 6 distributed generation pricing principles

    The Electricity Authority is reviewing the distributed generation pricing principles (DGPP) in Schedule 6.4 of the Electricity Industry Participation Code 2010 (Code).

    Latest Activity: 6 Dec 2016 Authority decision on the review of DGPPs and ACOT

  • Bid and offer provisions of the Code

    This project has been completed. The Authority is reviewing the provisions of the Code related to the revision of bids, offers and reserve offers. This includes a review of gate closure.

    Latest Activity: 17 Nov 2015 Decisions and Reasons paper published

  • Research Project: Effects of low fixed charges

    The Authority requested the Retail Advisory Group (RAG) investigate the competition, reliability and efficiency effects of the Low Fixed Charge (LFC) Regulations, focusing on whether the Regulations inhibit efficient distribution and retail pricing and th

    Latest Activity: 21 Oct 2015 RAG meeting - 21 October 2015

  • Transpower TPM operational review

    As a result of Transpower’s operational review it has recommended that the Electricity Authority consider amending the Transmission pricing methodology (TPM).

    Latest Activity: 25 Aug 2015 Decisions and reasons paper published - HVDC component

  • Exemption application - classification of NAaN assets under the TPM

    Transpower and Vector have both requested an exemption from obligations in clauses 8 to 26 of Schedule 12.4

    Latest Activity: 25 May – 15 Sep 2015 Vector's request

  • Changes to constrained-on provisions of the Code

    We are reviewing the constrained-on provisions of the Code

    Latest Activity: 26 Mar 2019

  • Review of spot market trading conduct provisions

    We are reviewing the trading conduct provisions in light of events that have tested these provisions. We will take into account any findings from case studies, performance reports and compliance reports.

    Latest Activity: 26 Mar 2019

Completed projects

Frequency regulation: frequency keeping constrained on/off Outcome: Completed:
This project has been completed. The current method for selecting the frequency keeper does not always allow the lowest priced provider or providers to be selected. We are proposing a Code amendment to address this issue. This project has been completed. 11 Jul 2018
Exploring refinements to the spot market Outcome: Completed:
The Authority is investigating enhancements to the spot market to improve retail competition and make spot prices more efficient. Proposal to develop dispatch-based real-time pricing option 31 Jul 2017