Skip to content.
Sections
Home About Us Consumer Industry Contact Vacancies
Document Actions

Upper South Island reactive support

Original proposal

On 1 June 2007, Transpower applied to the Electricity Commission (Commission) for approval of interim grid expenditure (IGE) for up to $64.4 million for increased reactive support in Christchurch and the upper South Island (USI Reactive Support IGE Application).

Transpower proposed to install the following reactive support components:

  • One 75 Mvar capacitor at Islington 220 kV in 2008;
  • One +/-100 Mvar dynamic reactive support at Islington 220 kV in 2009; (this component has since been modified - see below)
  • One +/-40 Mvar dynamic reactive support at Kikiwa 220 kV in 2009; and
  • Reactive Power Controller (RPC) upgrade/replacement at Islington in 2009.

Transpower considered that its proposal was urgent because the components are required by 2008 and 2009. If this project was included in a Grid Upgrade Plan, the components would not be installed by the “need” date, this is why Transpower submitted this proposal as an application for IGE.

Modification to Upper South Island reactive support IGE application (July 2007)

On 12 July 2007, the Commission received a letter from Transpower that sought a modification to the USI reactive support IGE Application. 

Transpower’s modification was to add a further +50 MVar dynamic reactive support at Islington 220 kV to the proposed +/-100 MVar dynamic reactive support for the Islington 220kV.  Transpower believed that it would be able to install the additional +50 MVar range within the cost estimate set out the original application (i.e. up to $4.7million (in 2008 $) and $59.7 million (in 2009 $)).

Additional information (June/July 2007)

Additional information on cost estimates for this project was provided by Transpower on 21 June 2007:

On 28 June 2007, the Commission sought further information from Transpower which Transpower responded to on 12 July 2007. 

Stakeholder feedback (June 2007)

The Commission published Transpower's proposal on 1 June 2007 and sought comments from interested parties.

Submissions closed on 25 June 2007 and the Commission received three submissions.

In addition, on 13 July 2007, the Commission provided interested parties with the opportunity to provide any comments in relation to Transpower’s modification to its proposal by 5pm on Friday 20 July 2007.  However, no comments were received. 

Final decision (July 2007)

On 25 July 2007, the Commission approved IGE of the lesser of $64.4 million or the actual nominal cost of the project at the time of commissioning (i.e. the capitalised book value).  Accordingly, under rule 17.1, Transpower may recover from designated transmission customers the lesser of $64.4 million or the capitalised book value of the project. 

A summary of the issues raised in the submissions and an explanation of the Commission’s final decision is found in the explanatory paper .

The Commission was assisted in its decision making by analysis of the information provided by Transpower, and analysis carried out by Commission staff and advisers.

Request for amendment and Commission's decision (May/June 2008)

On 29 May 2008, Transpower sought approval for an increase in the total project costs for the proposal from $64.4 million to $70.0 million as it was expecting higher costs for the Islington Reactive Power Controller upgrade component of the proposal.

On 19 June 2008, in accordance with rule 17.2 of section III of part F, the Commission agreed to amend the IGE previously approved by increasing it from $64.4 million to an amount being the lesser of $70 million or the actual nominal cost of the project at the time of commissioning.

    Last update on 24 June 2008 10:32 AM