Opex Capex Review (2012/13-2014/15)

In order to set a maximum allowable revenue (MAR) to apply to Transpower for each year of a given regulatory control period (RCP), the Commission will specify the levels of operating expenditure and capital expenditure that will apply.  The process for doing this is that Transpower will be required to provide forecasts of the expenditure it considers necessary, with the Commission reviewing this and after forming its own view, consulting on its draft decision. After taking into account all feedback received during consultation, the Commission will make a final determination and use this determination when calculating the forecast MAR to apply. These reviews will occur prior to the start of each RCP.

The Commission’s decisions on Transpower’s forecasts of expenditure for the years from 2012/13 to 2014/15 were made on 12 August 2011.  The final determination is made in November 2011 when the forecast MARs are set by the Commission for the 2012/13 to 2014/15 pricing years.  The determination is made by amendment to the Commerce Act (Transpower Individual Price-Quality Path) Determination 2010.

The Commission made final decisions on 12 August 2011 on the opex and capex allowances that will apply to Transpower’s maximum allowance revenues for 2012/13-2014/15 (see Supporting Documents).

The Commission accepted an application by Transpower to include further opex allowances for the upper South Island load controller, which has the intended effect of deferring the need for transmission investment.