Levy-funded appropriations

2025/26 Levy-funded appropriations

Upcoming Open Closed Decision
View submissions Submissions closed 13 December 2024
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Decision

The Government has approved an increase in the Authority’s levy-funded appropriation in Budget 2025.

The confirmed increase is $7.8 million to the Electricity Industry Governance and Market Operations appropriation 2025/26 and outyears, taking the Authority’s total funding to $119.7 million for 2025/26.

This funding recognises the work the Authority needs to complete to promote a reliable and affordable supply of electricity as Aotearoa electrifies and transitions to an increasingly renewables-based system.

The uplift will enable us to:

  • Pay for the increased cost of the system operator contract: $5.7m to enable Transpower to maintain its current obligations and deliver the system operator service
  • Cover service provider contractual obligations: $0.8m to fund inflation uplifts across the third-party service providers we contract to operate the electricity markets
  • Deliver high priority work to improve the electricity market for consumers: $1.3m to accelerate our work towards achieving a competitive, reliable and efficient electricity industry for the long-term benefit of consumers and for New Zealand.

Consultation

This consultation sought feedback on the Authority’s levy-funded appropriations for 2025/26, as well as our draft regulatory strategy and indicative work programme for 2025/26.

We sought feedback on three options for our operating funding, the Electricity Industry Governance and Market Operations appropriation:

  • Option 1: No change
  • Option 2: System operator uplift +$5.7 million
  • Option 3: System operator and inflation uplift +$7.8 million

We sought support for Option 3, which would enable us to maintain third-party service levels and deliver high priority and high impact work faster. This aligns with Government priorities to boost our work to improve competition and security of supply, to achieve better outcomes for consumers.

About 70% of the Authority’s operating appropriation is made up of third-party service provider costs. The electricity system is becoming increasingly complex, which is resulting in third parties needing to do more and requiring more funding to do so. For example, in 2025/26 there will be an 11% increase ($5.7m) to our system operator service provider agreement, from the significant increase in volume and complexity of its activities.

We proposed no change to our other two appropriations that are contingent in nature: Managing the Security of New Zealand’s Electricity Supply and the Electricity Litigation Fund appropriations.

Thank you to all who engaged in this consultation. Submissions informed our advice to Government on the appropriate levies and funding for our work in 2025/26.

Consultation documents

Levy-funded appropriations 202526 - consultation paper

Levy-funded appropriations 202526 - consultation paper
Summary of funding options

Summary of funding options

Submissions

Download all submissions (.zip)