Pricing

This page provides information about pricing, rentals and transmission agreements.

  • Pricing information – we use a regulated charging methodology to allocate annual revenue to transmission customers.
  • Rental information – we allocate out the surplus from the wholesale electricity market.
  • Transmission Agreement information – we maintain agreements with our customers around how they will be connected to the transmission network.

 

Pricing

Transpower determines annual transmission charges each year in accordance with the Transmission Pricing Methodology (TPM), which is a schedule of the Electricity Industry Participation Code, and is governed by the Electricity Authority. Rates are fixed for the year and paid in monthly instalments.

 

Key Terms

Some key transmission pricing terminology that may appear in our invoices or pricing communications:

Term

Explanation

Connection Charge

The sum of the annual asset, maintenance, operating and (injection for generation customers) cost components for a connection asset over that pricing year.  The charge recovers part of Transpower’s AC revenue.

Interconnection Charge

Recovers the remainder of Transpower’s AC revenue and is based on a customer’s contribution to Regional Coincident Peak Demand (RCPD).

HVDC Charge

Recovers Transpower’s revenue allowance associated with the HVDC interisland link and is based on a customer’s historic anytime maximum injection (HAMI).

Connection Asset

A grid asset that connects a customer to the interconnected transmission network.

Regional Coincident Peak Demand (RCPD)

Average of the ‘n’ ½ hour net offtakes during the regional coincident peak periods for the region for a customer at a connection location during the capacity measurement period (CMP)

n=100 in Lower North and Lower South Island and n=100 in the Upper South Island and Upper South Island USI and UNI. For the North Island and Lower South Island the months between November and April are excluded from CMP.

Historic Anytime Maximum Injection (HAMI)

The average of the 12 highest injections at a South Island generation connection location during any of the four immediately preceding pricing years.

Anytime Maximum Demand/Injection (AMD/AMI)

The average of the 12 highest off-take/injection quantities during the previous CMP.

Capacity Measurement Period (CMP)

The twelve months from 1 September to 31 August used to determine capacity factors such as SIMI, RCPD, AMI and AMD.

New Investment Contract (or Customer Investment Contract)

A bilateral contract between Transpower and a customer, under which Transpower agrees to provide new or upgraded grid assets in return for payment from the customer.

South Island Mean Injection (SIMI) An average measure of total energy injected over a capacity measurement period (CMP), measured in MWh. This was first applied for pricing year beginning April 2017 and once fully transitioned, will be measured as the average injection across five years.

Transmission pricing data sheet

The following document provides the transmission pricing rates applicable for charging for each pricing year April – March. It shows a high-level overview of how these charges are broadly allocated between connection, interconnection and HVDC assets.  

Transmission Pricing Data 2018/19 [ pdf 1.25 MB ]

 

Our latest charges for each electricity distribution business are disclosed under Information Disclosures regulation.

 

Under clause 42 of the TPM, Transpower must publish information relating to any approved Prudent Discount Agreements (PDA). Transpower currently has two PDAs in place, one at Aniwhenua and Matahina and the other at Waipori. We also have two Notional Embedding Agreements (NEA) in place which were the type of agreement that preceded PDAs. The NEAs are for generation at Patea and Waitaki.

Aniwhenua and Matahina
Aniwhenua and Matahina PDA supporting information [ pdf 488.53 KB ]
Aniwhenua and Matahina PDA external report [ pdf 2.09 MB ]
Waipori
Waipori PDA supporting information [ pdf 124.38 KB ]
Waipori PDA external report [ pdf 2.37 MB ]
Patea

Parties involved are Powerco Limited and Trustpower Limited

Contract commenced 1 February 2004 and expires 31 January 2019. The annuity paid is $20,938/month (ex GST)
Blackpoint

Parties involved are Meridian Energy Limited and Network Waitaki Limited

Contract commenced 1 April 2006 and expires 31 March 2026. The annuity paid is $18,821.42/month (ex GST)

Rentals

Transmission rentals (aka Loss and Constraint Excess) is the surplus created in the wholesale electricity market once purchasers have been invoiced and generators have been paid. Nodal pricing is used to calculate wholesale electricity prices based on marginal costs at injection and off-take points. Surpluses arise because:

  • losses are priced at the marginal loss rate while loss quantities are determined by the average loss rate (which is lower than the marginal rate)
  • when a constraint occurs, consumers pay for all the energy consumed at nodes "downstream" of the constraint at the (higher) marginal prices set at those nodes, but some of the energy consumed at the "downstream" nodes is generated at "upstream" nodes where the prices are lower, and generators injecting at those nodes receive those lower prices.

Under section 73 of part 14, Transpower receives the monthly rentals. The overview below outlines Transpower's methodology to allocate the excess and a summary of the historical allocation.

Transmission rentals guide (2008) [ pdf 325.69 KB ]
Historic rental breakdown [ xlsx 55.05 KB ]

Transmission Agreements

Transmission Agreements set out the terms on which Transpower will:

  • permit the Customer’s Assets to be connected to the grid
  • make the grid available for the conveyance of electricity

The below spreadsheet outlines which of our customers have entered into the Benchmark Agreement outlined in the Electricity Industry Participation Code and the date when we last made changes to their schedules. We have also provided the details of any contracts with amended clauses, and identified where customers have legacy 'connection contracts' rather than transmission agreements.

Summary of Transmission Agreements [ xlsx 28.02 KB ]
Benchmark Agreement [ pdf 501.48 KB ]
Amended Clauses to Transmission Agreements [ pdf 165.56 KB ]