Technical amendments to improve transmission pricing methodology

We’ve amended the transmission pricing methodology (TPM) to ensure it continues to function as intended and delivers long-term benefits to consumers.

The Authority has made two technical amendments to the TPM to:

• implement indexation to reflect the Commerce Commission’s decision to index Transpower’s regulatory asset base (RAB), and
• clarify the formula for the simple method benefit-based charge cap (SMBC) to ensure consistent treatment of new customers.

Indexation of Transpower’s RAB

The TPM has been updated to reflect the Commission’s decision to apply indexation to Transpower’s RAB under Part 4 of the Commerce Act 1986. This ensures the TPM remains consistent with the Commission’s approach to asset valuation and depreciation when calculating Transpower’s annual cost recovery. This will take effect from 1 April 2027.

Clarifying the SMBC formula

The SMBC formula has been amended to address timing-related inconsistencies that could result in disproportionately high benefit-based charges for new customers. The revised formula standardises the allocators used, ensuring the cap is calculated consistently across the five-year simple method period. This will take effect from 15 December 2025.

These amendments are the latest refinements related to the TPM to ensure it remains fit for purpose – details on those changes are on our TPM project webpage.

Read our decision paper