Transpower Input Methodologies

The input methodologies determination for Transpower includes input methodologies that apply to individual price-quality regulation and input methodologies that apply to information disclosure regulation.

Transpower is subject to the regulatory provisions under subpart 9 of Part 4 of the Commerce Act 1986 (the Act). Subpart 9 provides that electricity lines services, including Transpower, are subject to price-quality regulation and information disclosure. Transpower is subject to individual price-quality regulation. 

The Commission made its input methodologies determination for electricity lines services supplied by Transpower (electricity transmission services) on 22 December 2010 and published the determination in the New Zealand Gazette on 20 January 2011. The determination includes input methodologies for asset valuation, cost allocation, regulatory tax treatment, the cost of capital and regulatory rules and processes. 

In addition to these input methodologies, the Commission is also required to determine an input methodology for Transpower’s capital expenditure proposals (Capex IM). 

The Capex IM must include:

(a) requirements that must be met by Transpower, including the scope and specificity of information required, the extent of independent verification and audit, and the extent of consultation and agreement with consumers; and

(b) the criteria the Commission will use to evaluate capital expenditure proposals; and

(c) time frames and processes for evaluating capital expenditure proposals, including what happens if the Commission does not comply with those time frames

The Capex IM must be determined no later than 1 February 2012.

On this page you will find the Transpower input methodologies determination and the associated Reasons Paper located under Supporting Documents under the heading Input Methodologies for Transpower.  Documents relating to consultation undertaken by the Commission in making the Transpower input methodologies determination can be located under Consultation Prior to December 2010.

On 8 March 2011 the Commission published a memorandum on its process for considering requests for amendments or clarifications of the Part 4 determinations it made in December 2010 (PDF). Requests for amendments or clarifications and the Commission’s response are summarised in Request for Clarification/Amendments to Part 4 Determinations Commission Responses 2011 (XLS). The full requests relating to the EDBs input methodologies determination and the Commission’s responses can be found below.

Archived documents

Documents relating to the consultation for the Capex IM are in the online archive.

Cost of capital

Determinations of the Cost of Capital in accordance with the Input Methodologies Determination are published on the Cost of Capital page.

On 15 March 2012, to comply with an order from the High Court, we issued a consultation paper on the leverage assumption in the Cost of Capital IM for Transpower. The process and documents relevant to this consultation can be found below including our draft decision on leverage. Submissions on this draft decision closed on 5 April 2012 and can also be found on this page.

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