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

  • 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: 8 Jul 2019 MDAG briefing on Trading Conduct

  • 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: 1 Jul 2019 Two additions to the list of distributed generation

  • Spot market settlement on real-time pricing

    We have decided to implement our dispatch-based, look-ahead design for real-time pricing to make wholesale spot prices more certain, more accurate, and more efficient.

    Latest Activity: 28 Jun 2019 Decision to implement RTP

  • Removing constrained-on payments for generation ramping down

    Latest Activity: 25 Jun 2019 Removing constrained on payments for ramp-rate constrained generation

  • 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: 4 Jun 2019 Decision paper and summary of submissions

  • 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

  • Changes to constrained-on provisions of the Code

    Latest Activity: 7 Dec 2018 Constrained-on provisions of the Code

  • 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: 15 Aug 2017 Decision on making price forecasts more accurate

  • 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: 11 Oct – 28 Nov 2016 WAG discussion paper: Instantaneous reserve event charge and cost allocation

  • 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: Sep 2015 Wind generators to offer plant in a single band

  • 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: Jul 2015 Background

  • 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: Feb 2015 Operational review proposal documents

  • 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: Nov 2014 Low fixed charge tariff option

  • 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: 17 Sep – 1 Oct 2013 Draft decision on exemption application classification of NAaN assets under the TPM

  • 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: May 2012 Background on bid and offer revision

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