Trustpower says the new user-pays model to allocate costs doesn't establish clear benefits. Photo / 123RF
Trustpower will appeal the Electricity Authority's decision to replace the transmission pricing guidelines, saying the new user-pays model to allocate costs doesn't establish clear benefits.
The electricity generator and retailer will seek a judicial review
in the High Court of last month's decision that changes the way Transpower charges for access to the national grid to a user-pays model from the current one-size-fits-all regime. That shift will largely benefit South Island generators and users who've essentially subsidised infrastructure built for their North Island counterparts.
Trustpower said the changes are a fundamental and unjustified change to transmission pricing and will affect the entire economy.
"Fundamental changes need to be rigorously assessed to ensure that the changes are well justified and will produce real benefits for customers," Trustpower chair Paul Ridley-Smith said in a statement.
"The expert advice we have received suggests the analysis undertaken by the EA, particularly in relation to the costs and benefits of its proposal, does not establish these clear benefits.
"A transfer of costs is not an efficiency gain. Therefore, High Court review is appropriate."
Transmission prices account for about 10 per cent of a household power bill and the latest changes are scheduled to take effect in 2023.
The EA estimates they could deliver net benefits worth $1.3 billion over the next 30 years, the median of a $400 million to $2.7b range.
The latest action is Trustpower's second on the review, with the power company seeking more time in 2016 to submit on issues raised by the regulator. The court declined to intervene while the process was ongoing.