# Introduction

This work supports the Authority's consultation on a new Settlement Residual Allocation Methodology. 

The workbook "SRAM impact assessment - consultation paper.xlsx" published on the Authority's website compares settlement residual rebates in 2021/22 ($103m total, which excludes August 2021 as was not yet settled at the time of preparing the paper) with 
indicative settlement residual rebates customers would receive under the options considered in the Authority’s paper. 
The workbook also puts the SRAM options in the context of transmission charges, and illustrates the longer-term impact using a simple projection.

The modelling files published on the EMI website produces the results included in sheet 'Input-simple BB' of the workbook 'SRAM impact assessment - consultation paper.xlsx', ie it produces the indicative settlement residual rebates customers would receive under "simple BB" option considered in the Authority’s consultation paper.




# Overview of approach

Each SPD branch has been mapped to a simple method BBC region (as per the indicative pricing that supported the Authority's proposed new TPM).  In summary, the rules we adopted for this were as follows

1.	Branches that cross boundary between an HV and an LV region (interconnecting transformers) are assigned to the LV region.
2.	Branches that cross boundary between two LV regions (circuits or interconnecting transformers) are assigned 50:50 to each region.
3.	Branches that cross boundary between two HV regions (circuits) are assigned to the downstream region of the predominant flow direction.
4.	For avoidance of doubt, supply transformers and generator transformers are simply assigned to the region in which they lie.
5.	Non-Transpower assets are ignored. Hence Transpower assets that only connect to another region via EDB assets, such as Hobson St T12, which connects to the 110 kV network via Vector assets), are treated as supply transformers and assigned to the region in which they lie, in this case UNI_HV.


The rentals from each branch are then rebated to transmission customers using the customer level allocators for simple method regions from Transpower's indicative pricing based on the new TPM.



# Key output

This produces the output file:

* output.csv - This provides an estimate of how residual LCE would have been rebated across investment regions on the basis of pricing year 2020/21 residual LCE using only indicative simple method regional allocators from the new TPM proposal.

Note that the modelling uses the residual LCE scale factor to scale the rentals associated with each branch. 
While this produces rebates similar in terms of total amount as the actual rebates in pricing year 2020/21, this is not accurate at a branch level. 

Note: the simple BB method assumes that Transpower would continue to apply the current approach for connection assets (Transpower paid approximately $10m in rebates to customers 2021/22). The modelling in the spreadsheet SRAM impact assessment - consultation paper.xlsx' uses
the actual customer allocations for 2021/22 (ie, connections asset rebates are not modelled the branch level).  To ensure that in total only $103m are allocated, the simple BB allocations are scaled.   



# Content

The modelling files are in three folders
Input
Output
Model

The file "List of files.xlsx', alongside this 'About.txt' file, lists all files that are being released and explains their purpose/contents.



# Installation

This uses R 3.6.3. Install these versions of [R](https://cran.r-project.org/bin/windows/base/old/3.6.3/) and [Rtools](https://cran.r-project.org/bin/windows/Rtools/history.html).
Then run the following to install dependencies.

```
source('renv/activate.R')
renv::restore()
```

# Setup


To run the calculation after installation and setup run `source('main.R')`