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Contact address: PO Box 10041, Wellington 6143

 

 

Electricity Industry Participation Code (Transmission Pricing Methodology Related Amendments) Amendment 2025

 

This amendment to the Electricity Industry Participation Code 2010 (Code) is made under section 38 of the Electricity Industry Act 2010 (Act) by the Electricity Authority, having complied with section 39 of that Act.

 

 

 

 

Contents

 

1

Title

1

2

Commencement

2

3

Code amended

2

4

Clause 3 of Schedule 12.4 amended (General Definitions)

2

5

Clause 26 of Schedule 12.4 amended (Asset Component)

2

6

Clause 27 of Schedule 12.4 amended (Anticipatory BBIs)

3

7

New clause 27A of Schedule 12.4 inserted (Revaluation for Connection Assets and Anticipatory Connection Assets)

4

 

8

Clause 35 of Schedule 12.4 amended (Calculation of Benefit-based Charges)

4

9

Clause 39 of Schedule 12.4 amended (Covered Cost)

4

10

Clause 83 of Schedule 12.4 amended (Benefit-based Charge Adjustment Event: New Customer)

5

 

11

Clause 97 of Schedule 12.4 amended (Reassignment Amount)

7

12

Clause 102 of Schedule 12.4 amended (Forecast Peak Loading and Reassignment Factors)

7

 

13

Clause 110 of Schedule 12.4 amended (Cap and Cap Condition)

7

 

 

 

 

Amendment

 

1        Title

This is the Electricity Industry Participation Code (Transmission Pricing Methodology Related Amendments) Amendment 2025.

 

2        Commencement

(1)     Clauses 6(1), 6(3), 8, 9(1), 10, 11, 12, and 13 come into force on 15 December 2025.

(2)     The remaining clauses in this amendment come into force on 1 April 2027.

 

3        Code amended

This amendment amends the Electricity Industry Participation Code 2010.

 

4        Clause 3 of Schedule 12.4 amended (General Definitions)

          In clause 3 of Schedule 12.4, insert in its appropriate alphabetical order:

revaluation means— 

(a)              for a connection asset or anticipatory connection asset and financial year, the amount calculated under clause 27A for the asset and financial year; and 

(b)              for an asset comprised in a BBI (other than an anticipatory BBI) and a financial year, the amount calculated under subclause 39(2A) for the asset and financial year 

 

5       Clause 26 of Schedule 12.4 amended (Asset Component)

         In clause 26 of Schedule 12.4, replace subclauses (7) and (8) with:

(7)     The connection asset return rate for a pricing year (ARR) is calculated as follows:

 

 

where

 

r

is Transpower’s PQ WACC (pre-tax) for the pricing year

 

 

Vtotal

is the total closing RAB value of all connection assets for the preceding financial year

 

 

Vtotal anticipatory

is the part of Vtotal attributable to anticipatory connection assets, as determined by Transpower

 

 

Dtotal

is total depreciation of all connection assets other than investment agreement assets during the preceding financial year, excluding accelerated depreciation

 

 

Dtotal anticipatory

is the part of Dtotal attributable to anticipatory connection assets, as determined by Transpower

 

 

RVtotal

is total revaluation for all connection assets and the preceding financial year

 

 

RVtotal anticipatory

is the part of RVtotal attributable to anticipatory connection assets, as determined by Transpower

 

 

RCtotal

is the total replacement cost of all connection assets other than investment agreement assets and anticipatory connection assets at the end of the preceding financial year.

(8)        The discounted connection asset return rate for a pricing year (DARR) is calculated as follows:

 

 

where

 

r

is Transpower’s PQ WACC (pre-tax) for the pricing year

 

 

 

Vtotal anticipatory

is the part of the total closing RAB value of all connection assets for the preceding financial year attributable to anticipatory connection assets, as determined by Transpower

 

 

 

 

Dtotal anticipatory

is the part of total depreciation of all connection assets other than investment agreement assets during the preceding financial year, excluding accelerated depreciation, attributable to anticipatory connection assets, as determined by Transpower

 

 

 

 

RVtotal anticipatory

is total revaluation for all anticipatory connection assets and the preceding financial year

 

 

 

 

RC′total

is the total replacement cost of all connection assets (including connection assets that are investment agreement assets) other than anticipatory connection assets at the end of the preceding financial year.

 

 

6       Clause 27 of Schedule 12.4 amended (Anticipatory BBIs)

(1)     In clause 27(2)(b) of Schedule 12.4, replace “CVC” with “COVC” in each place.

(2)     In clause 27(2) of Schedule 12.4, replace paragraph (b) with:

(b)     that has a covered cost for the pricing year (COVC) calculated as follows:

 

 

where

 

r

is Transpower’s PQ WACC (pre-tax) for the pricing year

 

 

 

Vanticipatory

is the part of the total closing RAB value for the preceding financial year attributable to the anticipatory connection asset, as determined by Transpower

 

 

 

 

Danticipatory

is the part of total depreciation during the preceding financial year, excluding accelerated depreciation, attributable to the anticipatory connection asset, as determined by Transpower

 

 

 

 

RVanticipatory

is revaluation for the anticipatory connection asset and preceding financial year; and

 

(3)     In clause 27(2)(d), replace “cand” with “and”.

 

7       New clause 27A of Schedule 12.4 inserted (Revaluation for Connection Assets and Anticipatory Connection Assets)

         After clause 27 of Schedule 12.4, insert:

27A   Revaluation for Connection Assets and Anticipatory Connection Assets

          Revaluation for a connection asset or anticipatory connection asset and financial year (RV) is calculated as follows:

 

 

where

 

RVIM

is revaluation for the asset and financial year calculated under the Transpower IMs, as determined by Transpower

 

 

FRR

is the forecast revaluation rate used to calculate the forecast revaluation component of maximum revenue for the pricing year starting immediately before the start of the financial year

 

 

RR

is the revaluation rate for the financial year calculated under the Transpower IMs

 

 

r

is the corporate tax rate, as defined in the Transpower IMs, at the start of the financial year.

 

8       Clause 35 of Schedule 12.4 amended (Calculation of Benefit-based Charges)

         In clause 35(2) of Schedule 12.4, replace “CC” with “COVC” in each place.

 

9       Clause 39 of Schedule 12.4 amended (Covered Cost)

(1)     In clause 39(1) of Schedule 12.4, replace “CC” with “COVC” in each place.

(2)     In clause 39 of Schedule 12.4, replace subclause (2) with:

(2)     The capital charge for an asset and financial year (C) is calculated—

(a)     if the asset had an opening RAB value for the financial year, as follows:

 

 

where

 

r

is Transpower’s PQ WACC (vanilla) at the start of the financial year

 

 

V

is, subject to subclause 7, the opening RAB value for the asset and financial year

 

 

RV

is revaluation for the asset and financial year; or

 

(b)     if the asset was commissioned during the financial year, as follows:

 

where

 

V

is, subject to subclause (7), the asset’s value of commissioned asset

 

 

r

is Transpower’s PQ WACC (vanilla) at the start of the financial year

 

 

m

is the month of the financial year during which the asset was commissioned (for example, m = 3 for September).

 

 

(2A)  Revaluation for an asset comprised in a BBI and a financial year (RV) is calculated as follows:

 

 

where

 

RVIM

is revaluation for the asset and financial year calculated under the Transpower IMs, as determined by Transpower

 

 

FRR

is the forecast revaluation rate used to calculate the forecast revaluation component of maximum revenue for the pricing year starting immediately before the start of the financial year

 

 

RR

is the revaluation rate for the financial year calculated under the Transpower IMs.

 

10     Clause 83 of Schedule 12.4 amended (Benefit-based Charge Adjustment Event: New Customer)

(1)     In clause 83 of Schedule 12.4, replace subclause (5B) with:

 (5B)  Subject to subclause (9A), the new customer’s simple method BBC cap (SMBC) is calculated as follows:

 

 

where

 

E

is Transpower’s estimate of the value of the new customer’s intra-regional allocator for the relevant regional customer group under paragraph 83(3)(a)

 

 

J

is the number of customers of the same type as the new customer (generator or connected asset owner) as at the later of 1 April 2023 and the start of the relevant simple method period—

(a)    at the new customer’s connection location; or

 

(b)    if there are no such customers at the new customer’s connection location, at the connection location electrically closest to the new customer’s connection location at which there is or was 1 or more such customers, as determined by Transpower,

each such customer being customer j

 

 

BBCj total

is:

 

 

where

 

CAij          is customer j’s BBI customer allocation, as at the later of 1 April 2023 and the start of the relevant simple method period,  for post-2019 BBIs under the simple method for the regional customer group in which customer j’s connection location is located and in respect of investment region i

 

COVCi total is the total covered cost of all post-2019 BBIs under the simple method in investment region i at the time the new customer connected to the grid

 

 

Ej

is the value of customer j’s intra-regional allocator, as at the later of 1 April 2023 and the start of the relevant simple method period, for the regional customer group in which customer j’s connection location is located.

(2)     In clause 83(5C)(a) of Schedule 12.4, definition of BBC(3) total, replace “BBIs” with “post-2019 BBIs”.

(3)     In clause 83(5C) of Schedule 12.4, replace paragraph (b) with:

(b)   calculate the new customer’s BBI customer allocation for each relevant post-2019 BBI (CA) as follows:

 

 

where

 

SMBCregion

is the part of the new customer’s simple method benefit cap attributed to the investment region in which the relevant post-2019 BBI is located under paragraph (a)

 

 

COVCregion total

is the total covered cost of all relevant post-2019 BBIs under the simple method located in the investment region at the time the new customer connected to the grid; and

11      Clause 97 of Schedule 12.4 amended (Reassignment Amount)

          In clause 97 of Schedule 12.4, replace “CC” with “COVC” in each place.

 

12      Clause 102 of Schedule 12.4 amended (Forecast Peak Loading and Reassignment Factors)

          In clause 102(4) of Schedule 12.4:

          (a)          replace “CCtotal” with “COVCtotal” in each place; and

          (b)          replace “CCi” with “COVCi” in each place.

 

13      Clause 110 of Schedule 12.4 amended (Cap and Cap Condition)

          In clause 110(2) of Schedule 12.4, replace “CC” with “CAPC” in each place.

 

 

Made at Wellington on            November 2025

 

 

 

 

Anna Kominik

Chair

Electricity Authority

 

 

 

 

 

Certified in order for signature:

 

 

 

 

 

Nicholai Mumford                                                      Rachael Brown

Senior Legal Counsel                                                 Partner

Electricity Authority                                                   Bell Gully

      November 2025                                                          November 2025

 

                                                                                                                       

 

Explanatory Note

 

This note is not part of the amendment but is intended to indicate its general effect.

 

Clauses 6(1), 6(3), 8, 9(1), 10, 11, 12, and 13 of this amendment to the Electricity Industry Participation Code 2010 (Code) come into force on 15 December 2025. The remaining clauses come into force on 1 April 2027.

 

The amendment amends Schedule 12.4 of the Code (the transmission pricing methodology (TPM)) to:

·         incorporate indexation to ensure that costs recovered through the TPM remain broadly aligned with the way costs are calculated for Transpower under Part 4 of the Commerce Act;

·         standardise the allocators used in the simple method benefit-based charges (BBC) cap formula to ensure a consistent calculation of the cap in any pricing period; and

·         make minor editorial changes to make the TPM clearer.

 

 

 

 

 

 

 

This is secondary legislation issued under the authority of the Legislation Act 2019.

Title

Electricity Industry Participation Code (Transmission Pricing Methodology Related Amendments) Amendment 2025

Principal or amendment

Amendment

Consolidated version

No

Empowering Act and provisions

Electricity Industry Act 2010, section 38

Replacement empowering Act and provisions

Not applicable

Maker name

Electricity Authority

Administering agency

Electricity Authority

Date made

6 November 2025

Publication date

11 November 2025

Notification date

11 November 2025

Commencement date

15 December 2025 and 1 April 2027

End date (when applicable)

Not applicable

Consolidation as at date

Not applicable

Related instruments

Electricity Industry Participation Code 2010