✨ Transmission Policy Guidelines
1740 NEW ZEALAND GAZETTE, No. 75 27 MAY 2009
Environmental effects
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Final environmental requirements are determined by consenting authorities under the Resource Management Act 1991 which provides the statutory framework for dealing with environmental effects.
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To the extent that the Commission considers the environmental effects of new lines proposed by Transpower in a grid upgrade plan, it should also take into account any longer term benefits that larger capacity lines may provide by avoiding multiple smaller lines.
Transmission alternatives
- As part of the consideration of transmission investments where the total cost of a project is more than $20M, the Commission should ensure that transmission alternatives are considered to the extent practicable subject to the following conditions:
• only alternatives which have a high probability of proceeding, and where reliability can be maintained by contingency measures if the alternative is delayed or does not proceed, should be considered;
• alternatives which are only likely to proceed if they are assisted financially by the Government or relevant body should not be considered unless the Government or relevant body has agreed to provide such assistance.
- As part of its consideration of transmission pricing, the Commission should consider whether there would be net benefits in providing for a mechanism whereby investments in transmission alternatives receive payments reflecting some or all of the value of avoided transmission investment. This is a complex subject, and the Commission will need to take into account, amongst other things, practicalities, effects on incentives to invest in alternatives, and the extent of assurance that grid reliability standards will be met.
Pricing for connection to and use of the national grid
- Transpower should determine its total revenue requirement (covering both sunk and new investments) subject to the constraints of the Commerce Act 1986. A transmission pricing methodology should determine how this total revenue is recovered from parties under the agreements for connection to and use of the grid.
Cost recovery and pricing principles
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The Government expects transmission services to be priced as efficiently as possible and, subject to the Commerce Act 1986, Transpower’s charges to recover the full economic costs of its services.
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The Commission should ensure that the following principles are applied by Transpower in developing any transmission pricing methodology, and by the Commission in approving it:
• the costs of connection should as far as possible be allocated on a user-pays basis
• the pricing of new and replacement investments in the grid should provide beneficiaries with strong incentives to identify least-cost investment options,
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NZ Gazette 2009, No 75
✨ LLM interpretation of page content
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Transmission Policy Objectives
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🏭 Trade, Customs & IndustryTransmission Services, Policy Objectives, Grid Reliability, Resilience, Renewables, Pricing, Efficiency