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New timing for delayed transmission pricing tomorrow

Electricity Authority to set out new timing for delayed transmission pricing tomorrow

By Paul McBeth

June 19 (BusinessDesk) – The Electricity Authority will tomorrow announce a new timeline for its controversial transmission pricing plan, which was delayed after mistakes were found in analysis underpinning the modelling.

Chief executive Carl Hansen told Parliament's commerce select committee he was “very unhappy” with the errors that were discovered in the Oakley Greenwood cost benefit analysis, which “didn't stack up” on closer examination. The regulator had previously stuck to its April 2020 deadline to implement the new guidelines for the transmission pricing methodology – which seek to divvy up the costs for the national grid – but Hansen today said the authority will be "putting out an announcement tomorrow around future timing".

Energy and resources minister Judith Collins assured the committee she hadn't had any conversations with EA board members about delaying the decision until after the September election. She said the electricity industry is a “litigious sector” and the authority was “let down” by the cost-benefit analysis.

The transmission pricing methodology had attracted strong opposition from some electricity producers, carriers and users because it would essentially have shifted the cost of the grid upgrades to the North Island, which was thought to be the greatest source of demand and the biggest beneficiaries of recent investment to the network. In contrast, South Island generators and consumers, such as Meridian Energy and the Tiwai Point aluminium smelter, would see a reduction in their costs.

When quizzed about the country's electricity distribution companies and their asset management plans after Commerce Commission data showed a number of the 29 firms needed to upgrade their networks, Collins said she expected some consolidation and greater collaboration over the coming decade as consumers demand more alignment from the lines operators, which are regulated monopolies in their respective districts.

Collins also told the committee that she expected to receive a Ministry of Business, Innovation and Employment report into petrol pricing later this month. She declined to pre-empt the report's findings by commenting before its release, although said it was "the right thing to do".

(BusinessDesk)

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