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North Auckland and Northland proposal


Transpower’s application (September 2007)

On 21 September 2007, Transpower New Zealand Limited submitted to the Electricity Commission a new grid upgrade plan (2007 GUP) under clause 12 of section III of part F of the Electricity Governance Rules 2003.

The 2007 GUP includes two proposals relating to investments in North Auckland and Northland. 

The first proposal (NAaN proposal 1) has been submitted as a reliability investment and includes the installation of a 220kV cross harbour cable connection between Penrose and Albany substations, and the reinforcement of Penrose substation from Pakuranga substation.

 The second proposal (NAaN proposal 2) has also been submitted as a reliability investment, and involves Transpower securing rights to preserve the option to install a second cable.

Modelling material provided by Transpower in support of its proposal

Opportunity for comment (27 September 2007)

Under rule 13.3.2 and rule 13.3.5 of section III of part F of the Electricity Governance Rules 2003, the Commission gave notice that it was providing designated transmission customers and parties affected by the proposals with an opportunity to: 
  • provide written comments on NAaN proposal 1 and NAaN proposal 2; and
  • request that the Commission consider alternatives to NAaN proposal 1, and alternatives to NAaN proposal 2. 
Comments and/or requests were sought by the Commission by midday on Friday 9 November 2007.  The Commission received 10 submissions.

Commission's comments on draft proposal

Outstanding issues (September 2007)

 In preparing submissions, designated transmission customers and affected parties should note that the Commission raised with Transpower a number of issues relating to NAaN proposal 1 prior to receiving the 2007 GUP.  These are summarised below and further details are provided in the Commission’s letter of 31 August 2007.

 1 - Northern Generation Option - the Commission has asked Transpower to further explain its indicative GIT analysis of the Northern generation option (which has not been included as an alternative project);

2 – Capital Costs- Transpower has indicated that it will provide additional detail regarding capital costs shortly in a format previously agreed with the Commission;

3 – The Commission has asked Transpower to explain the economic basis for its load shifting assumptions between Penrose and Mt Roskill grid exit points;

4 –The GIT application relies on significant avoided investment costs in Vector’s network.  The Commission is seeking further information regarding the costs that will be avoided by Vector if NAaN proposal 1 is implemented;

5 – Transpower has agreed to provide a revised reliability benefit analysis;

6 – The Commission has asked for further information regarding the property costs relating to the HTC alternative.

On 2 October 2007, the Commission wrote to Transpower seeking additional information on the issues listed above. On 15 October 2007, Transpower wrote to the Commission providing further information.

Additional scenario (October 2007)

In light of the recently finalised NZES and other developments in the Government's climate change policies, the Commission wrote to Transpower on 12 October 2007 pdf [244 KB]

to ask Transpower to provide revised NPV results for the NAaN proposals based on the addition of a “90% renewables by 2025” scenario.  The Commission will consider this new scenario as well as the 4 other scenarios.

On 26 October 2007, Transpower provided the results of the analysis.

Timetable and Amendments

On 20 December 2007 the Commission wrote to Transpower proposing a revised timetable for NAaN Proposals 1 and 2.

On 13 February 2007, Transpower wrote to the Commission advising that it was unable to agree a timetable as it was still discussing the timing of grid reinforcements into Penrose and through to Albany with Vector.

Transpower suggested that the agreement on the timetable be deferred until Transpower had completed the work.

On 9 May 2008, Transpower submitted revised versions of the NAaN proposals to the Commission. On 14 May 2008, the Commission and Transpower agreed to a timetable for consideration and approval of the proposals (“May 2008 timetable”).

On 9 May 2008, Transpower submitted revised versions of the NAaN proposals to the Commission. On 14 May 2008, the Commission and Transpower agreed to a timetable for consideration and decision of the proposals (“May 2008 timetable”).  The May 2008 timetable lapsed as the Commission’s review of the revised versions of the NAaN proposals required further discussion between the Commission and Transpower.

Accordingly, on 1 December 2008, the Commission and Transpower agreed to an amended timetable (“December 2008 timetable”).

Revised proposals submitted (May 2008)

On 9 May 2008, Transpower submitted revised versions of the NAaN proposals (revised Proposals) to the Commission. Transpower is now seeking approval for $577 million for proposal 1 and $12.9 million for proposal 2.

The main changes to the original proposals are:

  • the amount for which approval is sought has increased from $515 million to $577 million (in $2013) for proposal 1;
  • the amount for which approval is sought for proposal 2 has increased from $6.2 million to $12.9 million (in $2009);
  • Transpower advises that the technical need date for proposal 1 is 2016 but is seeking approval for a 2013 commissioning date;
  • Transpower’s proposal 1 anticipates using the Vector tunnel between Penrose and Hobson substations as opposed to the road route option even though the costs are greater;
  • additional works have also been included, notably a new 220/110kV transformer at Penrose which will resolve an issue created by the North Island Grid Upgrade project; and
  • Transpower provided further analysis of the non-transmission option (generation at Rodney).

 

Opportunity for comment (May 2008)

Under rule 13.3.2 and rule 13.3.5 of section III of part F of the Electricity Governance Rules 2003, the Commission gives notice  to provide designated transmission customers and parties affected by the revised proposals with an opportunity to:

  • provide written comments on Transpower’s revised proposals; and
  • request that the Commission consider alternatives to Transpower’s revised proposals. 

Comments and/or requests were sought by the Commission by 5.00 pm on Thursday 5 June 2008.  The Commission received 8 submissions.

Correspondence

Notice of Intention (19 December 2008)

On 19 December 2008, the Commission published a notice of its intention to decline Transpower’s NAaN proposal 1.

Reasons for Decision (December 2008)

The document below presents the Commission’s analysis of NAaN proposal 1 and explains the reasons supporting the Commission’s intention to decline the proposal.

The Commission was assisted in its decision making by analysis of the information provided by Transpower undertaken by its staff and a number of key advisors.

Opportunity for comment

Under rule 15.2 of section III of part F of the Electricity Governance Rules 2003, a designated transmission customer, an authorised representative of parties substantially affected by the Grid Upgrade Plan, or Transpower, may, within 10 working days of the date of publication of the notice of intention (that is, by 5pm on 8 January 2009), request that the Commission hold a public conference if they consider that:

  • The interests of end use customers are materially adversely affected by the cost or the service outcome of the reliability investment to which the notice relates; or
  • The Grid Investment Test has not been applied properly to the Grid Upgrade Plan

The purpose of a public conference is to provide a final opportunity for comment on the reliability investment to which the notice relates.

Public conference

On 19 December 2008, the Electricity Commission published a notice of intention to decline Transpower's NAaN proposal 1.

On 23 December 2008, the Commission received requests for a public conference from Transpower and Vector Ltd under rule 15.2 of section III of part F of the Electricity Governance Rules 2003 and has agreed to hold a public conference. The purpose of the public conference is to provide a final opportunity for comment on the proposed investment.

The Commission invited parties to register their interest in attending the NAaN proposal conference.

The conference was held on Monday, 2 March 2009 at:

Rendezvous Hotel Auckland
Corner of Vincent Street and Mayoral Drive
Auckland

Technical Briefing

To assist submitters in preparing their submissions, the Commission held a technical briefing on 13 February 2009 in Auckland. 

A summary of the relevant questions asked of the Commission and associated answers is available below.

Call for submissions

In order to make the public conference process as transparent and efficient as possible, the Commission invited interested parties (whether intending to be present at the conference or not) to provide a written submission in order to assist the Commission in making its final decision.

As part of its preparation for the public conference, the Commission invited submissions on the Commission's decision to decline NAaN proposal 1. The Commission sought written submissions by 5pm on Friday 20 February 2009. The Commission received 18 submissions.

Public conference: presentations

The following presentations were made at the 2nd of March 2009 public conference regarding the Commission’s notice of intention to decline the NAaN Investment Proposal.

 Public conference: transcript

Transpower reports

Transpower made the following reports available at the public conference:

Comments period.

The commission would appreciate receiving comments on the new material provided at the conference in the above reports. The deadline to provide comments to the Commission was 5pm on Monday 16 March 2009. The Commission received 9 comments/submissions.

 

NAaN Investment Proposal 1 – Final Decision

On 19 December 2008, the Commission issued a notice of intention to decline Transpower's NAaN proposal 1 in accordance with rule 15.1 of the Electricity Governance Rules 2003.

At the request of a number of affected parties, a public conference was held in Auckland on 2 March 2009. The purpose of the public conference was to provide the affected parties with a final opportunity to comment on NAaN proposal 1.

Following the Commission’s consideration of additional material made available at the public conference, the Commission has decided to approve NAaN proposal 1. The Commission has published its final reasons for decision document below.

The Commission was assisted in its decision making by analysis of the information provided by Transpower undertaken by its staff.

Withdrawal of proposal 2

On 20 April 2009, Transpower wrote to the Commission withdrawing the North Auckland and Northland proposal 2. Transpower advised that the technical issues related to a second cable in the Vector tunnel along with diversity risks need further investigation. A copy of the letter is available below:

Report on live line working

Following the NAaN public conference, held in Auckland on 2 March 2009, questions were raised regarding the reconductoring of live transmission lines, particularly where lines had significant under build as occurs on the Henderson-Otahuhu line. As a result the Commission engaged KT Power to assess and report on the opportunities for live line working in New Zealand.

 

Last update on 20 July 2009 03:23 PM