Transpower may submit a proposal to seek approval for a major capital investment at anytime. These investments enhance or develop the transmission network, rather than simply replace existing assets.
Major capital projects have expected costs of greater than $20m. Financially, these projects are standalone from the base expenditure we approve at the outset of the regulatory period, with separate incentive arrangements. Transpower is not able to use funds from its base allowance, or an approved major capital project to fund over expenditure of another major capital project.
The Capital Expenditure Input Methodology sets out the requirements Transpower follows when preparing major capital proposals and the criteria that we use to review and approve a major capital proposal.
The transmission network supplying Bombay and Wiri substations is ageing and requires refurbishment. This network includes the transmission lines between Bombay and Otahuhu substations and Bombay and Meremere substations.
The closure of Southdown and Otahuhu Power stations in Auckland and the proposed closure of the Rankine units at Huntly Power Station in Waikato are expected to cause voltage management issues in the Auckland and Waikato regions as peak electricity demand increases.