Next steps in our network pricing reform work

The Electricity Authority welcomes Transpower’s consultation for its operational review of the Transmission Pricing Methodology (TPM).

Efficient network pricing is essential for delivering better outcomes for New Zealanders. It helps ensure the right network and generation assets are built, in the right places and at the right time. This helps keep the lights on for New Zealanders, at the lowest cost possible.

Transpower’s consultation is an important input into our network pricing reform work. We introduced the new TPM in 2023. Since then, we’ve listened to feedback and made several amendments to the Electricity Industry Participation Code so the TPM works better and supports efficient pricing.

Our focus is on ensuring the methodologies deliver the outcomes we intended and can respond to real-world challenges. This includes encouraging new generation in the right places and making sure network costs fall where they should. These issues are front of mind for many communities right now.

Transpower’s practical experience applying the TPM gives it useful insights about where refinements may be needed, and we value the greater understanding that will come from its operational review.

At the same time, we have identified our own set of potential amendments to the TPM to improve the efficiency and predictability of charges and respond to some stakeholder concerns. We are also progressing distribution pricing reform, including reconsidering the Distributed Generation Pricing Principles.

Our aim is to ensure that transmission and distribution pricing work well together and provide a coherent set of incentives for the sector.

Over the coming months, we will:

• Consult on proposed changes to the Distributed Generation Pricing Principles.
• Consult on proposed TPM changes – proposals from the Authority and any received from Transpower following its operational review.
• Provide a post-consultation update – on decision timings, and next steps for areas not currently proposed for Code amendment.

We appreciate your continued engagement in these projects, and look forward to seeing your feedback on Transpower’s consultation.