Transpower input methodologies
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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 review the IMs at least every seven years. We substantially completed our first review of the Transpower IMs in 2016, and completed our first review of the Capex IM in 2018. We completed the second review of the Transpower IMs and Capex IM on 13 December 2023. 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 – certain determinations and reasons papers can be found via the links below.
2023 input methodologies review
We completed the second review of the Transpower IMs and Capex IM on 13 December 2023.
2018 Capex IM review
We completed the first review of the Capex IM in 2018.
2016 input methodologies review
We substantially completed the first review of the Transpower IMs in 2016.
Other past amendments and clarifications
These are certain past decisions we have made related to input methodologies for Transpower, and the process of how we got to these decisions.
Current input methodologies for Transpower
The consolidated Transpower IMs determination below includes the input methodologies that apply for information disclosure regulation and Transpower Individual Price-Quality Path Determination 2020 [2019] NZCC 19. The consolidated Capex IM below incorporates amendments contained in relevant amendments determinations as at 29 January 2020.
The consolidated Transpower IMs determination below does not include the amendments to the input methodologies in “Transpower Input Methodologies (IM Review 2023) Amendment Determination 2023 [2023] NZCC 38” (Transpower IMs Amendment Determination 2023) that apply for:
- information disclosure regulation from the commencement of disclosure year 2026; and
- an individual price-quality path that commences on or after 1 April 2025.
Interested persons should use the Transpower IMs Amendment Determination 2023 below to identify the input methodologies that apply for:
- information disclosure regulation from the commencement of disclosure year 2026; and
- an individual price-quality path that commences on or after 1 April 2025.
The consolidated Capex IM below does not include the amendments to the input methodologies in “Transpower Capital Expenditure Input Methodology (IM Review 2023) Amendment Determination 2023 [2023] NZCC 39” (Capex IM Amendment Determination 2023) that apply for:
- any individual price-quality path proposal submitted after 14 December 2023;
- any major capital expenditure proposal notified on or after 1 April 2025; and
- an individual price-quality path which commences on or after 1 April 2025.
Interested persons should use the Capex IM Amendment Determination 2023 below to identify the input methodologies that apply for:
- any individual price-quality path proposal submitted after 14 December 2023;
- any major capital expenditure proposal notified on or after 1 April 2025; and
- an individual price-quality path which commences on or after 1 April 2025.