Photo: RNZ / Russell Palmer
The Commerce Commission has approved Transpower's near $400-million proposal to strengthen the national electricity grid.
But a question mark remained over the need for an undersea high-voltage direct current link (HVDC) to connect the national grid between the North and South Islands.
The commission said it was satisfied there was a need to strengthen the electricity transmission system over the next decade, in the long term interests of consumers.
However, it said Transpower needed to do more to assure customers the $103m investment in the Cook Strait undersea link would benefit consumers.
Transpower's Net-Zero Grid Pathways Phase One (NZGP1) proposal included three large projects to upgrade the capacity of the national grid.
The first two projects would upgrade the existing lines which run through the Central North Island and Wairakei regions.
The third was focused on building capacity in the HVDC link, which carried electricity between the North and South Islands.
Commissioner Vhari McWha said the commission was satisfied Transpower's capital expenditure on its central North Island and Wairakei projects would support a secure and reliable power system that was able to meet the increasing demand by New Zealand households, businesses and industry.
"At the same time, we are very conscious of the impact of these investment costs on New Zealand consumers - big and small - as they flow through to electricity bills," McWha said.
"So our approval is also based on being satisfied that consumers are going to get value for money - that the spend is justified, and the timing is right."
In its draft decision released in November 2023, the Commission questioned Transpower's proposal for its HVDC link, citing concerns over the timing and benefits to consumers.
In making its final decision, McWha said the Commission retained its draft decision to approve the HVDC component on the basis of firm assurance from Transpower that it would manage the timing risks.
"Several submitters supported our draft decision on the Cook Strait undersea link and have sought greater clarity about the steps Transpower will undertake to ensure there is public scrutiny of its decision to invest."