Technical amendments to improve transmission pricing methodology

We’re inviting people to share their views on two proposed technical amendments to the transmission pricing methodology (TPM).

The Transmission pricing methodology technical amendments consultation paper sets out our proposals to:

• align the TPM with recent Commerce Commission changes to index Transpower’s regulatory asset base
• clarify the simple method benefit-based charges cap formula.

These proposed changes help ensure the TPM continues to function as intended. A well-functioning TPM supports timely, well-placed investment and use of the grid, and the electrification of the economy for the benefit of all New Zealanders.

Implementation of indexation

The Commerce Commission has recently applied indexation to Transpower’s regulatory asset base (RAB). We’re proposing this change needs to be reflected in the TPM.

This change would ensure the approach to valuation and depreciation of assets in the TPM is consistent with the Commission’s approach for calculating the annual cost recovery profile under Transpower’s individual price-quality path (under Part 4 of the Commerce Act).

Clarification of simple method benefit-based charge cap

Transpower has identified a timing-related issue in the current calculation of the simple method benefit-based charge cap (SMBC).

The current formula is overly sensitive to when, and in what order, adjustment events (such as new customer connections) are processed. This can result in lower caps being used for later-arriving customers and inconsistencies depending on when other adjustment events are processed. This may create arbitrary outcomes that could inefficiently affect new customers’ decisions about when to connect to the grid.

We’re proposing to change the SMBC formula so it always uses the same customer allocations that applied at the start of the relevant (five-year) simple method period. This would ensure the result of the cap calculation is the same regardless of when the adjustment occurs within the five-year period.

Have your say

We welcome submissions by 5pm, Friday 29 August 2025.

Visit the consultation page for all the details