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Transmission Pricing Guidelines (Guidelines)

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The Commission is required, under rule 4 of section IV of part F of the rules, to prepare an issues paper on the process to be followed and guidelines to be used by Transpower in preparing a transmission pricing methodology.

The Commission consulted with the electricity industry about the proposed Guidelines to be used by Transpower by publishing an issues paper and draft Guidelines on 24 September 2004 and calling for submissions. Consultation closed on 5 November 2004 and the Commission reviewed submissions received.

Having completed its review of submissions, the Commission is required to publish the Guidelines to be used by Transpower in preparing a transmission pricing methodology (“the Guidelines”) as soon as practicable, under the requirements of rule 6.2. In accordance with this rule, the Commission published the Guidelines on this website on 22 December 2004 and provided a hard copy to Transpower on the same day. On 24 December 2004, the Commission issued a corrected version of the Guidelines, clarifying the charges for the existing HVDC link should be charged to existing South Island generators.

The Guidelines (December 2004)

Reconsultation material

The Commission has been directed by the High Court to reconsult on those of the 2005 Guidelines for transmission pricing methodology that relate to charging for the HVDC transmission line and cable between Benmore and Haywards.

On 11 November 2005, the Commission published a Second Issues Paper [pdf 394 KB] to reconsult on those Guidelines. Twelve submissions were received by the submission closing date of 12 December 2005.

Given the complexity of the issues to be considered, the Commission sought from the Minister of Energy an extension to complete its consideration of submissions. This extension was approved and the Commission had to complete its consideration of submissions by 10 March 2006.

The Commission also sought cross submissions from submitters. Eight cross submissions were received on the closing date of on 27 January 2006.

On 17 February 2006, the Commission published a summary of submissions and cross submissions, along with an indication of its view on the issues raised and its views about its preferred Guidelines.

Summary of submissions and draft decision pdf [1015 KB]

HVDC transmission pricing conference

The above summary document was used to facilitate a public conference on this issue, held in Wellington on 24 February 2006.

Details of the conference and presentations are set out below:

Final decision on the reconsultation

The Commission has completed its consideration of the submissions and cross submissions it has received in response to its issues paper reconsulting on the transmission pricing methodology Guidelines on charging for the HVDC transmission line and cable between Benmore and Haywards. The Commission has also completed its consideration of the presentations made at the recent conference on this matter, and the written answers to questions asked at the conference.

The Commission's final decisions can be found in the document Explanatory paper - Commission's final decision, HVDC transmission pricing methodology pdf [258 KB]

Appendix 2 of that document included the Commission's intended drafting of the Guidelines for the transmission pricing methodology in their entirety. Interested parties were invited to provide comments to the Commission by 5pm on Wednesday 15 March 2006 as to the intended drafting of the Guidelines following the re-consideration process.

The Commission received four responses on the drafting of the Guidelines. The Commission has completed its review of those responses and its final decision can be found in the document Guidelines for Transpower - Transmission Pricing Methodology pdf [51 KB].

The process to be followed in the development of the transmission pricing methodology remains unchanged from that published on 1 February 2005 (see below).

Explanatory material

Transmission Pricing Process

The Commission is required, under rule 4 of section IV of part F of the rules, to prepare an issues paper on the process to be followed and Guidelines to be used by Transpower in preparing a transmission pricing methodology.

The Commission consulted with the electricity industry about the proposed process to be used by Transpower by publishing an issues paper and draft process on 22 December 2004. Consultation closed on 19 January 2005 and the Commission proceeded to review submissions received.

Having completed its review of submissions, the Commission is required to publish the process to be used by Transpower in preparing a transmission pricing methodology (“the Process”) as soon as practicable, under the requirements of rule 6.1. In accordance with this rule, the Commission published the Process on this website on 1 February 2005 and provided a hard copy to Transpower on the same day.

In addition, an explanatory document was provided, which details the Commission’s consideration of submissions received and the reasons for its decisions.

Transpower's transmission pricing methodology project plan

Pursuant to the determination by the Commission of the Process to be followed by Transpower in preparing a transmission pricing methodology (Process) published on 1 February 2005, clause 1 requires Transpower to provide a project plan and milestones for the development of detailed transmission pricing methodology.

Transpower proposed the following project plans for completion of the transmission pricing methodology.

Transpower provided a transmission pricing methodology according to the revised project plan. However, before the Commission could complete consideration of this methodology, a High Court decision required the Commission to set aside the Guidelines and reconsult on those guidelines on charging for the HVDC transmission line and cable between Benmore and Haywards.

Following the reconsultation and publishing of the Guidelines, the Commission wrote to Transpower on 24 March 2006 confirming that the process for preparing a transmission pricing methodology continued to be appropriate.

The Commission received a project plan from Transpower on 19 April 2006 indicating the proposed transmission pricing methodology will be submitted by 22 June 2006.

Last update on 02 November 2006 09:24 AM

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