Transpower is now regulated under Part 4 of the Commerce Act by way of individual price-quality regulation. This took effect on 1 April 2011. The individual price-quality path governs Transpower’s revenues for each pricing year, with the paths being reset either every four or five years (as determined by the Commission).
Transpower - Maximum Revenue Compliance
Compliance with the Transpower price-quality path is achieved if the forecast revenues used to set Transpower’s charges for a pricing year do not exceed the forecast maximum allowance revenue (MAR).
Decision Not to Treat Transpower’s Instantaneous Reserve Fees as a Pass Through Cost
Shortly after the Commission accepted Transpower's settlement, Transpower sought relief from its increased instantaneous reserve fees by way of treating such fees as pass through costs. The Commission ruled that these costs were not to be treated as pass through costs under the settlement.
Transpower Grid Upgrade Plans
Transpower uses grid upgrade plans to seek regulatory approval for investment proposals to upgrade the high-voltage transmission network, or national grid.
Review of Transpower’s non Part F Capital Expenditure Proposals
Under the ASO, the Commission undertook annual reviews of Transpower's proposed non Part F capital expenditure, with the purpose of setting an amount to be used as a threshold.
Price-Quality Regulation that Applies to Transpower
The requirement to develop and apply a new type of regulation to Transpower was one of the key changes to the Commission’s regulatory responsibilities under the Commerce Amendment Act 2008. Individual price-quality regulation was implemented on 1 April 2011.
Transpower - Administrative Settlement
The Commission conducted a post breach inquiry and, after consultation, published in 2008 its decision accept a settlement from Transpower rather than place its transmission services under regulatory control. The settlement govern Transpower's revenues for each financial year until 30 June 2011.
