Introduction
Transpower receives monthly settlement residue payments from the Clearing Manager (NZX) under Part 14 of the Electricity Industry Participation Code 2010, and is required to allocate and pay the settlement residue received to customers on a monthly basis.
Current method
In 2023, the Electricity Authority decided on a new approach for allocating settlement residue to customers, and the Authority also amended the Code to allow Transpower to recover from all transmission customers its reasonable costs of developing, implementing and maintaining this function. Our Settlement Residue Allocation Methodology (SRAM) outlines our allocation methodology and our cost recovery methodology.
Under the SRAM, settlement residue related to interconnection assets will be allocated to customers identified (under the BBC simple method) as those expected to benefit from the assets located in each simple method region. Settlement residue related to connection assets is allocated to customers in proportion to their connection customer allocations for those assets.
Previous method
Here is our previous method for allocating settlement residue (often referred to as loss and constraint excess).