Electricity Commission rejects Transpower's proposed Auckland 400kV grid investment proposal

On 27 April 2006, the Electricity Commission issued its draft decision on Transpower's grid upgrade proposal to construct a 400kV line linking Whakamaru and Otahuhu by 2010. In response, Transpower has indicated that it will submit a new modified proposal.

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's proposal to construct the 400kV line is an "investment proposal", which was part of a grid upgrade plan submitted to the Electricity Commission for approval.

If the Commission approves the investment proposal, this allows 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 Electricity Governance Rules 2003 (Rules).

The Commission invited submissions on the proposal and its draft decision released on 27 April 2006 to turn down the proposal. However, on 1 June the Commission issued a further media release in response to a modified proposal to be put forward by Transpower which would involve building a 400kV line but only operating it at 220kV initially. The Commission has now suspended its official consideration of Transpower's original proposal but is still seeking comment until 23 June 2006 on:

• the four alternatives to Transpower's proposal that are set out in the Commission's draft decision;
• the idea raised in the draft decision on the possibility of Transpower acquiring a corridor through the Waikato to South Auckland in advance of the need for new transmission; and
• the Commission's draft decision on Transpower's proposal, including application of the Grid Investment Test.

The Commission stated that it will consult with Transpower over the timetable for its submission of any new grid proposal and has promised that it will consult the public and the electricity industry before making any decision on Transpower's new proposal.

For a copy of the consultation paper draft decision and more information on the 400kV draft decision visit the Electricity Commission's website www.electricitycommission.govt.nz.

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