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Input methodologies are the rules, requirements and processes that underpin regulation under Part 4 of the Commerce Act.
Input methodologies (IMs) are the rules, requirements and processes that underpin regulation under Part 4 of the Commerce Act. We must apply the input methodologies when we set price-quality paths and set information disclosure requirements. Regulated businesses are also required to apply the input methodologies.
There are two IM determinations that apply to Transpower.
The first is generally referred to as the Transpower Input Methodologies Determination (or the Transpower IMs for short). This covers matters such as how assets are to be valued, depreciated and revalued, how we estimate the cost of capital, how tax should be treated, and the allocation of common costs between Transpower's grid operator and system operator services.
The second is generally referred to as the capital expenditure input methodology (or the Capex IM for short). The Capex IM sets out the rules for Transpower proposing, and us assessing, Transpower's capital expenditure proposals.
The purpose of IMs is to promote certainty for suppliers and consumers in relation to the rules, processes and requirements for regulation.
The Transpower IMs were originally determined in 2010, and the Capex IM was originally determined in 2012.
We are required to to review the IMs at least every seven years. We completed our first review of the Transpower IMs in 2016, and our first review of the Capex IM in 2018. You can find more information about these reviews below.
The reasons for the Transpower IMs and Capex IM are captured in the reasons papers for the original IM determinations and all subsequent amendment determinations – these can be found via the links below.
Current input methodologies for Transpower
These are the current input methodologies that apply to Transpower.
These are the past decisions we have made related to input methodologies for Transpower, and the process of how we got to these decisions.