The Electricity Commission has turned down Transpower's bid to build a 430-pylon power line between Whakamaru and Auckland
The decision on the new 400 kilovolt line is only a draft one at this stage and a final ruling will be made in July.
The pylon plan has been strongly opposed by farmers and residents in the affected area.
Commission chair Roy Hemmingway said the electricity supply to Auckland should not be interrupted by the loss of a major transmission line and a major generation failure at the same time.
"There are concerns the system might not be able to sustain that at a peak time. We need to make some decisions on investments straight away," he said.
"We do have other options. Smaller, less expensive improvements to the existing grid should be able to get us out to 2017 without having to build a major new improvement on the grid such as a 400kv line."
Those improvements were likely to cost about $65 million.
He said they included technical improvements and upgrades which would give much more capacity to the existing grid.
"It buys us quite a bit of time to get us out to 2017 before a major new investment is needed assuming we don't have (new) generation in and we don't have a reduction in load growth."
Mr Hemmingway said Waikato farmers who opposed Transpower pylons going over their land needed to accept the inevitability of a new transmission line.
Transpower chief executive Dr Ralph Craven said today the 400kv line provided a sensible, economic, reliable and secure solution to Auckland and Northland's future electricity needs.
He said: "We've followed international best practice and been mindful of the need to provide the right environment for on-going business investment decisions in New Zealand, by providing for a robust and reliable future electricity supply."
He claimed the commission essentially agreed with Transpower that a new transmission line was needed from Whakamaru to Otahuhu and Transpower was obtaining a route for that line.
Consultation and submissions will be called for over the next three months.
Landowners have staunchly opposed the $700 million pylon plan since it was first aired in 2003.
Transpower has argued there was no alternative but to build the new line, which would affect 297 properties.
In 2004 Energy Minister Trevor Mallard asked the Electricity Commission to investigate whether alternatives had been properly considered.
New Era Energy, a lobby group representing farmers opposed to the pylons, said it was confident the commission would reject Transpower's plans.
- HERALD ONLINE STAFF, NZPA
Commission says 'no' to pylon plan
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