The Commerce Commission says Transpower should have planned for rises costs due to electricity supply constraints across Cook Strait.
The commission has turned down a request by the national grid operator to amend a settlement reached last year over breaching set limits on transmission price rises.
It wanted to remove instantaneous reserve fees - to ensure power kept flowing - from the deal, as operating costs would have risen from $3 million to a forecast $18.9 million this year.
But the commission says Transpower knew there was a risk the fees would increase if Pole One went out of service, yet did not include it as part of the settlement.
The deal stands as is until 2011.
Transpower wanted to pass the costs on to South Island generators.
