The Electricity Commission has been accused of ignoring the advice of its staff in granting approval for a planned high-voltage transmission line from south Waikato to Auckland.
The accusation was made by anti-pylon group New Era Energy, which is seeking a judicial review of the commission's decision in the High Court in Wellington.
The group's lawyer, Paul Cavanagh, QC, told the court on Tuesday that Transpower outlined a range of benefits that would arise from the lines.
However, Mr Cavanagh says an analysis by Electricity Commission staff found the benefits were either considerably less or non-existent.
Lawyers for the commission are likely to begin presenting their case on Tuesday, in which they are also expected to respond to an accusation that Government ministers gave inappropriate advice to the commission.
In court on Monday, the Government was accused of leaning on the Electricity Commission to get the result it wanted for the upgrade of the network.
Mr Cavanagh told the court that Deputy Prime Minister Michael Cullen and Energy Minister David Parker inappropriately directed the commission on what outcome it wanted.
He said the decision to approve the wires by the Electricity Commission in February 2007 was flawed because of pre-determination of the issues and because of bias.
The court heard that a majority of the commission's board members went on to approve the proposal, fearing that if they did not, they would be stripped of the power to make similar decisions in future.
Former chairman Roy Hemingway has issued an affadavit, which accused Mr Parker of being an advocate for the wires.
The affadavit also described a meeting between the commission and Dr Cullen, in which Dr Cullen said he would not tolerate a stalemate on the wires, but added that if anyone asked whether the meeting had occurred he would deny that it had taken place.
Resource consent hearings on an application to build the wires are nearing an end, and it is unclear what effect this week's hearing will have on the process.