10. Transmission Contracts
ECNZ's connection contracts with Transpower consist of a Memorandum of Understanding (MoU) that was entered into during 1997 following a protracted dispute on the appropriate basis for transmission pricing. This dispute was never resolved and the MoU represented a compromise position that was intended to be developed into a longer term agreement. In the context of the pending split, the parties agreed to extend the MoU until the split date of 31 March 1999.
ERTU concluded in September that a transitional connection arrangement was desirable as it minimised the risk of a failure to agree a long-term arrangement (or an inappropriate arrangement) in the period prior to settlement when the SOEs were focussing on establishment of their new businesses.
ERTU has continued to discuss with Transpower an arrangement which will achieve some certainty on the contract terms to apply to the three SOEs for transmission services from settlement. ERTU and Transpower have agreed a set of interim arrangements which provide continuity of service while preserving the ability of the new SOEs to negotiate with Transpower once established. Further details of this arrangement are contained in the Legal Transfer Report.
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