Transpower's $99 million upgrade to its Otahuhu substation is scheduled for completion early in 2010.
It is on the same site as the current substation, which failed in 2006, and will be physically separated from the existing switchyard to minimise vulnerability and improve its reliability.
The Court of
Appeal on Friday dismissed an appeal from the Major Electricity Users' Group against the Electricity Commission's approval of the upgrade.
In August last year the commission confirmed a decision to approve a Transpower plan to modernise the substation. Transpower proposes to build a new, separate, enclosed high-reliability 220kV switchyard on the site.
The users' group sought a judicial review of the decision which was dismissed by the High Court in March.
The group argued in the appeal that the commission got its analysis wrong and failed to evaluate cheaper alternatives properly.
Existing and new circuit connections will be diversified between the two switchyards. This means any major failure in one of the switchyards would not result in a total loss of electricity supply to areas that the Otahuhu substation feeds - the majority of Auckland - as happened for six hours two years ago when a D-shackle broke.
Work has already started, with some equipment commissioned and control and instrumentation cabling installed.
