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Transmission pricing methodology

The transmission pricing methodology is the method used to calculate transmission charges (the money that Transpower receives to fund the grid). It ensures transmission charges are allocated efficiently between transmission customers.

  • Distribution
  • Transmission

    • Open consultation

    Transmission Pricing Methodology amendments 2026

    Submissions due by 24 July 2026

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    Overview

    We're seeking feedback on seven amendments to the TPM to improve its efficiency and workability. Three proposals are from the Authority and four from Transpower’s TPM Operational Review. The changes would better align transmission charges with benefits, increase predictability, support efficient investment and reduce administrative costs. View consultation

    We expect to make a decision on six of the seven proposals in November 2026, allowing Transpower to incorporate any changes into its 2027/28 prices. We plan to decide on the proposal for anticipatory capacity in early 2027.

    Over the next couple of years, we will work closely with Transpower and engage with stakeholders as Transpower develops Code change proposals for the Authority to consider as part of its Operational Review. This work will support more efficient transmission pricing that improves outcomes for New Zealanders.

    Timeline

    Past activity

    Project background

    In 2022, we adopted a new transmission pricing methodology (TPM) into the Code. This was a significant process which involved crucial input from key stakeholders, industry participants, Transpower and the Commerce Commission. The new TPM ensures that transmission pricing is fit for purpose in the transition to a low-emissions economy and that the grid is paid for by those who are expected to benefit from investment in it.

    The new TPM will encourage more efficient use of the grid, and more efficient investment in transmission and generation assets. It will:

    • reduce the cost of electricity at peak times when New Zealanders want to use it most
    • ensure that those who set to benefit from areas of grid investment will pay for it
    • lead to lower prices in the long-term for delivered electricity.

    Our analysis suggests a central estimate of net benefit to New Zealanders of the new TPM of approximately $1.8 billion over the next 28 years.

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