Consultation on draft assumptions book v2.0
Transpower recently consulted on an update to the assumptions book for benefit-based charges (BBCs).
The consultation period was two weeks commencing 7 October 2024, with submissions due by 5pm on Monday, 21 October 2024.
The draft assumptions book consultation package consisted of the following documents:
- TPM Consultation Paper – Proposed updates to Assumptions Book v2.0
- Draft Assumptions Book v2.0 – tracked changes
- Appendix F of Draft Assumptions Book v2.0
- Technical assurance report on the reasonableness of the updates to the Draft Assumptions Book v2.0 from Jacobs
- Legal assurance on compliance of the Draft Assumptions Book v2.0 from Simpson Grierson
Response to suggested areas for development in Jacobs’ assurance report
In its review, Jacobs suggested some potential areas for future development of the assumptions book. Two related to regularly reviewing information (i.e. geothermal emissions factors and CCGT availability), one to further development of the spreadsheet data book, and one to further investigation of generation capex costs. As suggested by Jacobs, we do not consider that these suggestions necessitate any immediate changes to the assumptions book. We have noted these suggestions and will investigate them further as we work towards our next update, anticipated for next year.
Current assumptions book
Key documents
- BBC Assumptions Book v1.2 – clean
- BBC Assumptions Book v1.2 – tracked changes
- Appendix B – Simple Method Allocation Model
- Appendix C – Starting Simple Method IRAs, SMFs and Customer allocations for the first simple method period
- Appendix D – BBI Customer Allocation workbook - Adjustments up to 30 June 2024 - updated 30 August 2024
- Appendix E – BBI Covered Costs workbook
- BBC Assumptions Book v1.2 – Decision paper
- Legal Assurance Letter – Simpson Grierson
About our assumptions book
Our benefit-based charges (BBC) assumptions book is designed to outline the assumptions and detailed methodologies Transpower intends to apply for allocating and adjusting BBCs – calculating starting benefit-based investments (BBIs) customer allocations for post-2019 BBIs and adjusting BBCs. The assumptions book covers both standard methods (price-quantity method and resiliency method) and the simple method for calculating starting BBI customer allocations for post-2019 BBIs. We have taken a relatively detailed approach to provide greater (up-front) certainty about how BBCs will be allocated and adjusted under the TPM. It is a living document that will be updated from time to time.
Additional information
The Electricity Authority's (Authority's) transmission pricing methodology (TPM) contains the structural and fundamental aspects of the transmission pricing regime that has applied since 1 April 2023. The TPM also includes a role for secondary documentation to help ensure consistent and transparent application at an operational level. Under the TPM’s requirements for BBCs, Transpower must develop, consult on and publish an assumptions book. Where Transpower proposes to depart materially from the assumptions book we will explain and consult on this when we consult on our application of the relevant BBC allocation or adjustment methodology. We may not deviate from the assumptions book in any way that does not comply with the TPM or wider Code. The assumptions book will be consistent with the TPM and all aspects of the Code. It is not intended to replicate, and cannot change, the fundamental and structural requirements for allocating or adjusting BBCs, which are specified in the TPM itself.
Previous assumptions book editions
Previous versions of the assumptions book have been used as a basis for the analysis for the following BBIs:
| Assumptions book version | Benefit-based investment |
|---|---|
| V1.0 | CUWLP |
| V1.1 | WUNIVM Stage 1a – HAM STATCOM WUNIVM Stage 1b – OTA STATCOM HVDC Pole 2 refurbishment |
- Assumptions book v1.1 – March 2023
Key documents
- BBC Assumptions Book v1.1
- BBC Assumptions Book benefit factors
- BBC Assumptions Book v1.1 – Decision paper
Consultation process
On 1 February 2023 we began consulting on a draft update (v1.1), which included benefit factors in Chapter 5 and corrected some errors in Chapter 2 and 3. On 10 February 2023, we reissued the consultation paper and draft updated assumptions book to show correct spill paths in the diagram below paragraph 90. This was a minor correction. Due to the impact Cyclone Gabrielle had on some customers, we extended due dates for submissions and cross-submissions by two weeks. Submissions were due by 5pm Monday, 6 March 2023. We did not receive any submissions. Consequently, the cross-submission period was cancelled.
Our consultation package included:
- Assumptions book v1.0 – September 2022
Key documents
- TPM Determination: BBC Assumptions Book v1.0 - Decision Paper
- TPM Determination BBC Assumptions Book v1.0
- Simple BBI customer and regional allocations model
- Chapman Tripp assumptions book assurance letter
- KPMG assumptions book assurance opinion
- EY assumptions book management summary report
Consultation process
The consultation period was 4 weeks. Submissions were due by 5pm on Friday, 27 May 2022. This was followed by a 1-week period for cross-submissions. Cross-submissions were due by 5pm on Friday, 3 June 2022. We made changes to the assumptions book as a result of some of the feedback.
Consultation package
The draft assumptions book consultation package included:
- Part A: The draft assumption book consultation paper
- Part B: The draft assumption book
- Part C: Technical assurance on technical aspects of the Assumptions Book (draft for consultation) from KPMG and from Ernst and Young
- Part D: Legal assurance on the compliance of the Assumptions Book (draft for consultation) with the new TPM from Chapman Tripp
- Part E: Supporting information: Simple method customer allocation model - the model includes the simple method factors (SMF), regional net private benefit (RNPB), demand adjustment factors (IF) and proposed customer allocation (CA) values for the first simple method period.
- Part F: Supporting information: Arc flow data (this is the data that was used by Transpower in order to determine the modelled regions for the first simple method period) Arc-flow_file1 | Arc-flow_file2 | Arc-flow_file3 | Arc-flow_file4 | Arc-flow_file5 | Arc-flow_file6 | Arc-flow_file7 | Arc-flow_file8
Submissions
- Electra Limited submission draft assumptions book 27 May 22.pdf
- Manawa submission draft assumptions book 27 May 22.pdf
- Mercury submission draft assumptions book 26 May 2022.pdf
- Meridian submission draft assumptions book 27 May 22.pdf
- MEUG submission draft assumptions book 27 May 22.pdf
- Northpower submission draft assumptions book 27 May 2022.pdf
- Southern Generation Limited Partnership draft assumptions book 27 May 22.pdf
- Vector submission draft assumptions book 27 May 22.pdf
Cross-submissions
- Electra cross-submission draft assumptions book 3 June 22
- Manawa cross-submission draft assumptions book 3 June 22
- MEUG cross-submission draft assumptions book 3 June 22
- Vector cross-submission draft assumptions book 3 June 22
Online drop-in session
On Friday, 6 May 2022 at 1:30pm we hosted an online drop-in session. It was an opportunity for stakeholders to ask questions and seek clarifications about the consultation and the draft assumptions book itself. The session was recorded and transcribed for interested parties unable to attend on the day.