Compliance ReportINTEGRATED TRANSMISSION PLAN

SEPTEMBER 2017

INTEGRATEDTRANSMISSIONPLAN

APPENDIX:ITPCOMPLIANCE

INTRODUCTION

TheITPisasuiteofdocumentsthatdescribesourplansforourregulatedtransmissionbusiness.BeforeaRegulatoryControlPeriod(RCP)wemustsubmitanITPtotheCommissionsummarisingourexpenditureover10years.Wearealsorequiredtoprovideannualupdates.Our2017ITPisourthirdupdatetotheITPwedevelopedin2013tosupportourproposalforRCP2.In2018wecompleteanewITPtoourproposalforRCP3.TheCapexIMalsorequiresustosubmittotheCommissionbythelastworkingdayofSeptemberofeachdisclosureyear:

(a)ITPsupportingdocuments

(b)anupdatedITPnarrativethattakesaccountof:

(i) anymaterialchangestomatterscoveredintheITPnarrativemostrecentlysubmittedtotheCommission

(ii) thecontentoftheITPsupportingdocuments.

Wemustalsomakethismaterialavailableonourwebsite.

OUR2017ITPOur2017ITPreflectsthejourneywehavebeenon.Ithasbeendevelopedwiththedualaimofcommunicatingtechnicallycomplexmaterial,inamannerthatisclearandunderstandable,whilealsoaligningwithourregulatoryreportingrequirements.

REGULATORYREQUIREMENTSFORTHEITPANDSUPPORTINGDOCUMENTS

TheregulatoryrequirementsfortheITParesetoutinScheduleEoftheCapexIM.Thefollowingpagesreproducetheseintableformwithacommentaryexplaininghowour2017ITPdocumentsmeettherequirements.

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ScheduleE2clauses(ITPNarrative)

E2InformationtobeincludedintheITPnarrative(1)withreference,whererelevant,totheinformationcontainedintheITPsupportingdocuments,ahighlevel-

(a)overviewoftheexpenditureandoutputswhichareproposedforthefirstregulatoryperiodtowhichtheITPnarrativerelatescoincidingwiththedisclosureyearandforecastexpenditureneedsandoutputsoverthenextregulatoryperiod;

• ITPnarrative:Section3–Overviewofourplans• ITPnarrative:Section7–Ourexpenditureforecast• ITPnarrative:Section8–Ourserviceperformance• ITPschedulesthatformpartoftheITPNarrative.

(b)overviewofthekeyassumptionsandscenariosusedtodetermineforecastexpenditureandgridoutputs;

• ITPnarrative:Section3–Overviewofourplans• ITPnarrative:Section7–Ourexpenditureforecast

• viareferenceAMP:Section5–ExpenditureOverview• ITPnarrative:Section8–Ourserviceperformance

• viareferenceServicesReport:Part2:OutcurrentRCP2serviceperformancemeasures(c)assessmentofthekeyuncertaintiesinthekeyassumptions,andforecastexpenditureandgridoutputs;

• ITPnarrative:Section3–Overviewofourplans• viareferenceAMP:Section2:Gridexpenditureuncertainty• viareferenceAMP:Section5:Expenditureoverview–Keyuncertainties

(d)assessmentofthekeyrisksaffectingforecastexpenditure;

• ITPnarrative:Section3–RCP2uncertainties,risksandconstraints(e)assessmentofhowthekeyuncertaintiesandkeyriskswillaffectTranspower’sabilitytodelivertheforecastgridoutputs;

• ITPnarrative:Section3–RCP2uncertainties,risksandconstraintsandServiceoutcomesandSection8-OurServiceOutcomes.Noteourserviceperformance(e.g.gridreliability)isaffectedbyexternalfactors(e.g.weather,firesetc).WeintendtoelaboratefurtheronthislinkageinfutureITPs.

• viareferenceServicesReport:Part2:OutcurrentRCP2serviceperformancemeasures(f)descriptionoftheproposedmeasurestomanageandmitigatethekeyuncertaintiesandkeyrisks;and

• ITPnarrative:Chapter5and6–OurStrategicFrameworkandOurManagementApproach.Thesesectionsdiscussourstrategicandmanagementapproachincludingourriskandassuranceapproachandplanningprocess.WeintendtoelaboratefurtheronthislinkageinfutureITPs.

(g)descriptionofthekeyrelationships,includinganysynergiesortrade-offs,withinandbetweenthefollowing:

(i)projectsandprogrammesassumedforthepurposeofdeterminingtheforecastexpenditure;and(ii)theforecastgridoutputs.

• ITPnarrative:Chapter8–OurServicePerformance.Thissectioncommentsonchangesinassetstrategiesandnewconditioninformationaffectingthedeliveryoftheassethealthvolumetrictargets.WeintendtoelaboratefurtheronthislinkageinfutureITPs.

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ScheduleE2clauses(ITPNarrative)

(2)forecastexpenditureintheformofascheduleinrespectofeachdisclosureyearfor-(a)operatingexpenditure(disaggregatedbymajorareasofexpenditure);

• ITPnarrative:Chapter7–OurexpenditureforecastandITPSchedules:Tab4.(b)baseCapex(disaggregatedbymajorareasofexpenditure);and

• ITPnarrative:Chapter7–OurexpenditureforecastandITPSchedules:Tab2o viareferenceTPRChapter4:EnhancementandDevelopmentportfolioo viareferenceAMP:Chapter5–ExpenditureOverview

(c)approvedmajorCapex(disaggregatedbyproject);

• ITPnarrative:Chapter7–OurexpenditureforecastandITPSchedules:Tab5o viareferenceTPRChapter4:EnhancementandDevelopmentportfolio

(3)forecastgridoutputsintheformofascheduleinrespectofeachdisclosureyearfor-(a)eachrevenue-linkedgridoutputmeasuredescribedinthebaseCapexproposalrelatingtothefirstregulatoryperiodtowhichtheITPnarrativerelates;

• ITPnarrative:Chapter8–Ourserviceperformanceo viareferenceServicesReportPart2:OurCurrentRCP2ServicePerformanceMeasures

(b) allproposedgridoutputmeasuresotherthanthosereferredtoin(a)abovedescribedinthatbaseCapexproposalrelatingtothefirstregulatoryperiod;and• n/a.SeeServicesReport:Part3–StakeholderEngagementandtheRefreshofMeasuresforRCP3.

ThissectiondiscussesourdevelopmentofmeasuresforRCP3.(c)majorCapexprojectoutputsassumedtobedeliveredbyeachapprovedmajorCapexproject;

• ITPSchedules:Tab6.MajorCapex–Outputs(4)asummaryofmajorCapexprojectsunderdevelopment,including:

(a)asummaryofthekeyissuesbeingaddressedwithreferencetotheplanningreportwhichisanITPsupportingdocument;(b)estimatesoflikelycapitalexpenditure;and(c)estimatesofprojecttimings,includingthoserelatingtoconsultationperiods,submissionsforapproval,construction,andcommissioning.

• ITPnarrative:Chapter7–Ourexpenditureforecast,ITPSchedules:Tab6.MajorCapex–Outputs,andITPSchedules:Tab7.MajorCapex–UnderDevelop

o viareferenceTPRChapter4:EnhancementandDevelopmentportfolioo

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SupportingdocumentsITPClauseE3(a-c)

Thefollowingdocuments,preparedorupdatednomorethantwoyearsbeforethesubmissiondate:

• anassetmanagementplanthatincludestheinformationspecifiedinclauseE4See2017AssetManagementPlan(AMP)aplanningreportthatincludestheinformationspecifiedinclauseE5,andSee2017TransmissionPlanningReport(TPR)

• areportsettingoutTranspower’soutputandperformanceobjectives,thatincludestheinformationspecifiedinclauseE6.

See2017ServicesReport(SR)

ScheduleE4(AssetManagementPlan)

E4Informationtobeincludedintheassetmanagementplan(1)overallassetmanagementstrategyandobjectives;

• AMPSection1–Introduction• AMPSection3–PoweringNewZealanders:TodayandintotheFuture• AMPSection4–OurApproachtoAssetClassManagement• AMPSection6–GridAssetPortfolios• AMPSection7–ICTAssetPortfolios(2)overallassetriskmanagementframework;and

• AMPSection4–OurApproachtoAssetClassManagement(3)assetmanagementplansforeachassetclasscovering;

(a)specificationsforassetlifecycleactivities;(b)generalconditionofexistingassets;(c)intendedprogrammesofassetmanagementworks;(d)routinemaintenanceandrepairplansforassets;and(e)programmesforroutinemaintenanceandrepairplans.

• AMPSection4–OurApproachtoAssetClassManagement• AMPSection6–GridAssetPortfolios• AMPSection7–ICTAssetPortfolio• AMPSection8–BusinessSupportAssetPortfolio

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ScheduleE5(PlanningReport)

E5Informationtobeincludedintheplanningreport(1)thecapabilitiesoftheexistinggrid;

• TPRChapter2–ExistingNationalGrid• TPRChapter6–GridBackbone• TPRChapters7to19–Regions

(2)demandandgenerationforecastsfortheforthcoming10years;

• TPRChapter2–ExistingNationalGrid• TPRChapter3–InvestmentUncertainties• TPRChapters7to19-Regions

(3)thegrid’sabilitytomeetfuturedemandandgenerationneeds;

• TPRChapter6–GridBackbone• TPRChapters7to19–Regions

(4)theroleofthegridinfacilitatinggeneration;and;

• TPRChapter3–InvestmentUncertainties• TPRChapter6–GridBackbone• TPRChapters7to19–Regions

(5)gridinvestmentthatmayberequiredtomeetfutureneedsforthenext10yearsandbeyond,bywayof,(a)gridbackbonetransmissionplansforthemainNorthandSouthIslandtransmissioncorridorsandfortheHVDClink;

• TPRChapter6–GridBackbone(b)asetofregionalplans;

• TPRChapters7to19–Regions

ScheduleE6(ReportonOutputandPerformanceObjectives)

(1)alongertermviewofthegridoutputsandassociatedgridperformancethatwillbeeconomictoachieve,takingaccountof-

(a)performanceexpectationsofendusersofelectricity,includinginrelationtothevalueofunservedenergy;

(b)thecostsofdeliveringchangesinthelevelofgridoutputs;

(c)theimpactofcommittedexpenditureongridoutputs;and

(d)anyforecastdegradationinassetconditionorperformancewhichwillaffectgridoutputs.

• ServiceReportPart1–Howourservicesframeworkrelatestotheserviceperformancemeasures• ServicesReportPart2–Ourcurrentserviceperformancemeasures

(2)adetaileddescriptionontheanalysis,assumptionsandapproachusedtodeterminethelongertermview;and

• ServicesReportPart3–STAKEHOLDERengagementandtherefreshofmeasuresforrcp3• ServicesReportPart4:Howweusethetargetsandfuturedevelopment

(3)anapproachtoconvertthelongertermviewtoappropriateshortertermobjectivesforgridoutputs.

• ServicesReportPart4:Howweusethetargetsandfuturedevelopment

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