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Transmission Pricing Review
- Background
- Transmission Pricing Technical Group
- Stage 1 High Level Options Investigation
- Stage 2 Options
Background
The Commission has initiated a Transmission Pricing Review to undertake a wide-ranging review of options for the allocation methodology for transmission costs.
The Commission expects to undertake the review in three consultation stages; the first a review of high-level options, the second an analysis to identify stage 2 options, and finally a detailed evaluation of a preferred option for transmission pricing with the final issues paper planned for the end of 2010.
The Commission expects that any subsequent changes to Transpower’s Transmission Pricing Methodology will be effective from the start of the 2012 pricing year, although this will be dependent on the final option selected and the implementation requirements.
An overview of the project is available below:
Transmission Pricing Technical Group
The Commission has established a working group (Transmission Pricing Technical Group (TPTG)) to provide advice and assistance on the various project tasks. Details on the group with meeting minutes and papers are available from the following link:
Stage 1 High Level Options Investigation
The first stage of the review involved an investigation into the high level options for transmission pricing.
A consultation paper was published on 9 October 2009. The closing date for submissions was 5pm on Monday 7 December 2009. The Commission received 19 submissions.
The Commission held a conference to provide an overview of this consultation and other MDP consultation documents and to provide an opportunity for industry participants to discuss the options.
As part of the high level options investigation, the Commission has been considering the economic framework for transmission pricing, international and New Zealand experience as well as issues with current transmission pricing.
Reports on these topics and other reports referenced in the consultation paper are available below:
- Frontier Economics, Theory of efficient pricing of electricity transmission services, July 2009 pdf [489 KB]
- Frontier Economics, International transmission pricing review, July 2009 pdf [681 KB]
- Strata Energy Consulting, Report on transmission pricing methodologies - 1998 to 2008 pdf [1483 KB]
- Strata Energy Consulting, a discussion paper concerning transmission pricing issues identified by the TPTG pdf [205 KB]
- Covec, Locational signals for new investment, August 2004
- E. Grant Read, Locational Transmission Pricing, report prepared for Mighty River Power, February 2007 pdf [431 KB]
- Electricity Commission, Transmission Pricing Methodolgy Final Decision Paper, June 2007
Reports from CEO Forum
Stage 2 Options
A consultation paper was published on 27 July 2010. The closing date for submissions is 4pm on Friday 24 September 2010. Please note the closing date for submissions has been extended and differs from the date given in the consultation paper of 31 August 2010.
In response to queries about flow tracing from participants during the consultation period, a draft report, Transpower Asset Usage 2004 - 2008 pdf [7987 KB], has been made available. It includes:
- a brief overview of the flow-tracing approach (which is quite different to the marginal power flow allocation used as the basis for the Transmission Pricing Methodology some years ago); and
- illustrations of the electrical energy usage of assets on Transpower’s network, divided among the constituent customers.
Other useful links
Correspondence
The following letter from Transpower outlines issues that are relevant to the on-going transmission pricing review:
+64 4 460 8860
+64 4 460 8879