Transmission pricing methodology ready for consultation

The Electricity Authority has started consulting on a proposed new transmission pricing methodology (TPM). The consultation period will run from 8 October for eight weeks, with events being held around the country to ensure the Authority can continue to inform and engage with interested parties.

“The proposed new TPM better positions New Zealand to transition to a low-emissions economy by ensuring the best use of existing and future electricity infrastructure,” says Rob Bernau, Director Network Pricing at the Electricity Authority.

“Transmission pricing matters. It costs New Zealanders $800 million each year, and influences how we invest in and use the national grid. The Authority believes it is critical that transmission charges are efficient, and more closely reflect the actual cost of delivering electricity to household consumers and large industrial customers,” says Rob Bernau.

“It is widely agreed that the current TPM is no longer fit for purpose. It unnecessarily requires some consumers to pay a premium when power is most valuable to them, even when the grid has spare capacity. It encourages parties to invest in generation and emerging technologies simply to shift costs on to other consumers, who end up paying more for their electricity than they need to. This will only get worse as new technology gets cheaper.

“It is important to New Zealand’s future that we have a new TPM that supports the electrification of transport and industrial processes at the least cost to New Zealand consumers. The national grid has a key role to play as we transition to a low-emissions economy,” says Rob Bernau.

The Authority acknowledges Transpower’s role in developing the proposed new TPM. “We appreciate the substantial and sustained effort Transpower has put into developing the proposed new TPM which, in our view, is reflected in the high quality of the product,” says Rob Bernau.

Read the proposed new TPM and accompanying consultation documents, along with a short guide to the TPM.