Pursuant to section 52Q(5)(b) of Part 4 of the Commerce Act 1986 ("the Act"), the Commerce Commission
("the Commission") gives the following notice.
On 31 January 2012, the Commission made an amendment ("the Amendment") under section 52Q of Act to the Commerce Act (Transpower Individual Price-Quality Path) Determination 2010, Decision 714 ("the Determination").
The Amendment includes minor drafting changes to the Determination to assist with interpretation and application of the individual price-quality path in accordance with the new approval process for Transpower capital expenditure set out in the Transpower Capital Expenditure Input Methodology Determination ("Capex IM determination").
The Amendment makes the following changes to the Determination:
(a) Updates Transpower’s quality reporting requirements for planned and unplanned interruptions, aligning the reporting with the Electricity Information Disclosure Regulations;
(b) removes references to the old approval process for major capital expenditure, as those provisions are now redundant in light of the new Capex IM Determination approval process;
(c) clarifies the actual v forecast MAR wash-up to make it easier to follow in light of the new Capex IM Determination approval processes;
(d) adjusts major and minor capex expenditure where a minor capital expenditure becomes approved as
a major capital expenditure so that there is no unintended double-recovery or non-recovery; and
(e) gives effect to the "at risk" conditions that affect the major capital expenditure approved in accordance with the Commission’s Capex IM Determination, which provides for a reduced recovery where conditions attached to the approval are not met.
These changes do not alter the price-quality path, as the new approval process is in accordance with the Act and the applicable input methodologies.
The Amendment is effective on the day following the date of publication of this notice.
Copies of the Amendment and the Determination are available for inspection free of charge at the Commission (during ordinary office hours), on the Commission’s website
or for purchase at a reasonable price at the Commerce Commission, 44 The Terrace, Wellington.
Dated at Wellington this 9th day of February 2012.
The Electricity Industry Act 2010 introduced section 54S to the Commerce Act 1986 ("the Act"), which requires the Commission to determine an input methodology for capital expenditure proposals made by Transpower. The new capital expenditure input methodology replaces the existing approval process for capital expenditure, which currently follows the Electricity Governance Rules 2003. The determination giving effect to the capital expenditure input methodology is contained in the Transpower Capital Expenditure Input Methodology Determination ("Capex IM Determination"), which was issued by the Commission on 31 January 2012.
The approval procedures applying to major capital expenditure proposals by Transpower apply from the date
of commencement of the Capex IM Determination. Under the Act, the individual price-quality path may not be changed except in accordance with the Act and the Commerce Act (Transpower Input Methodologies) Determination 2010 ("IM Determination"). The procedures applying to Base capital expenditure projects may therefore only apply with effect from the next regulatory period commencing on 1 April 2015.