The Electricity Commission has released its Notice of Intention to approve Transpower's amendment to the North Island Grid Upgrade Project for the supply of electricity into, and north of, Auckland. Public consultation on Transpower's latest proposal will be held before the Commission makes its final decision.
On 31 January the Electricity Commission released its Notice of Intention to approve the revised Grid Upgrade Plan put forward by Transpower on 20 October 2006.
The latest Transpower proposal contains a suite of measures aimed at ensuring the security of electricity supply to Auckland, including the construction of a new transmission line between Whakamaru and Pakuranga which is capable of carrying 400kV but will only initially be energised at 220kV.
In Transpower's original proposal submitted to the Commission in September 2005, Transpower proposed the construction of a new 400kV double circuit line between Whakamaru and Otahuhu. This construction was proposed as the first step in accomplishing Transpower's long-term strategic vision for 400kV to replace 220kV as the core grid transmission voltage. Transpower submitted that the proposal was necessary to avoid an increase in risk to security of supply in the Auckland and Northland region at times of peak loading from 2010.
However, on 27 April 2006, the Commission gave notice under rule 15.1 of Section III of Part F of the Electricity Governance Rules 2003 (Rules) that it intended to decline to approve the original proposal.
A full commentary on Transpower's original proposal and the Commission's reasons for declining the proposal is available in an earlier Bell Gully article on our website "Electricity Commission turns down Transpower's proposed 400kV Whakamaru - Otahuhu line to be installed by 2010: A review". In brief some of the key reasons given by the Commission for its refusal included:
On 31 May 2006, at Transpower's request, the Commission agreed to suspend its consideration of the original proposal. At this time, Transpower advised the Commission that it intended to provide another proposal for the Commission's consideration and that it no longer wished to progress the specific 400kV proposal to which to the notice of intention issued on 27 April 2006 related.
On 20 October 2006, Transpower submitted its new proposal to the Commission.
In brief, the amended proposal put forward by Transpower involves:
Transpower's proposal is an "investment proposal" which, if it is approved by the Commission, will allow Transpower to recover the approved costs of that investment from designated transmission customers in accordance with the transmission pricing methodology set out in Section IV of Part F of the Rules.
The Commission is required to consider and assess Transpower's proposal in accordance with the processes and considerations set out in Section III of Part F of the Rules. In particular, rule 13.4 provides that, in order to be able to approve the proposal, the Commission must be satisfied that the proposed investment:
The Commission must also have in mind the objectives and outcomes specified in the latest Government Policy Statement (GPS) on Electricity Governance issued in October last year. These include:
The Commission's decision to give preliminary approval of Transpower's Proposal was not unanimous but the Commission's Deputy Chair, Peter Harris, notes in his Overview of the decision that:
At the time of publication the Commission had not released a detailed statement of its reasons for reaching the decision although it had indicated that this was to be available mid-February. Some of the reasons given for the decision outlined in the Overview include:
However, it is to be noted that the Commission's approval is limited to the first stage of Transpower's plan. It does not include approval for the upgrading of the proposed transmission line to 400kV and this approval is not being sought by Transpower in its new proposal.
After the Notice of Intention was released either a designated transmission customer, an authorised representative of parties substantially affected by the grid upgrade proposal, or Transpower, had the right to request the Commission to hold a public conference . The right to make this request closed on 15 February 2007.
The Commission has indicated on its website that it anticipates holding a public conference in late April or early May 2007. The public conference process includes the opportunity to make written submissions about the Commission's decision.
Following the public conference, the Commission may confirm or amend the Proposal. If no public conference is held, the Commission's decision, as set out in the Notice of Intention, is final.
For details on this decision visit the Electricity Commission's website at www.electricitycommission.govt.nz.
If you would like to know more about the decision or require assistance with the public consultation process, please contact any of our electricity law team or in the first instance please call:
For more information on any of the cases, articles and features in Commercial Quarterly, please email Diane Graham or call her on 64 9 916 8849.
This publication is necessarily brief and general in nature. You should seek professional advice before taking any action in relation to the matters dealt with in this publication.