Electricity Industry Participation Code 2010

Electricity Industry Participation Code 2010

Part 6B—Distributor pricing methodologies, information requirements and other requirements

Part 6B: inserted on 1 April 2026, by the Electricity Industry Participation Code (Connection Pricing Requirements) Amendment 2025.

History Notes

6B.1

Contents of this Part

This Part specifies—

  • (a) mandatory connection pricing methodologies which are the pricing methodologies that must be applied by distributors in relation to connection charges and pioneer scheme contributions; and
  • (b) information requirements for distributors in relation to access to distribution networks; and
  • (c) application of the dispute resolution process in Schedule 6.3 to the requirements under this Part where connection applicants are participants and enhancement of the processes available to non-participants.

6B.2

Application of this Part

  • (1) This Part does not apply to—
    • (a) any connection application received by a distributor prior to 1 April 2026; or
    • (b) a distributor in respect of the distributor's ownership or operation of a secondary network; or
    • (c) existing load connected, or a connection applicant seeking to connect load, to a secondary network.
  • (2) For the avoidance of doubt—
    • (a) this Part applies in addition to Part 6 and applies to all connection applications for load and, if there is any inconsistency between this Part and Part 6, this Part prevails;
    • (b) a connection applicant who is not a participant is not required to comply with this Part and cannot be subject to the enforcement measures set out in the Act or the Electricity Industry (Enforcement) Regulations 2010 for failing to comply with this Part.
  • (3) If an application under Part 6 includes both load and distributed generation—
    • (a) the connection enhancement cost allocation requirements and the capacity costing requirements must be applied to the load component of the application before Part 6 is applied to the distributed generation component of the application; and
    • (b) the pioneer scheme pricing methodology requirements and connection charge reconciliation methodology requirements must be applied to the connection as a whole.

Connection pricing methodologies

6B.3

Distributors must comply with mandatory connection pricing methodologies

  • (1) Each distributor must apply the mandatory connection pricing methodologies in subclause (2) in setting connection charges, including in the calculation of quoted charges and application of such charges, the allocation of costs to persons, and in otherwise recovering or allocating connection works costs.
  • (2) The mandatory connection pricing methodologies are:
    • (a) the connection enhancement cost allocation requirements in clause 6B.4:
    • (b) the capacity costing requirements in clause 6B.5:
    • (c) the pioneer scheme pricing methodology requirements in clauses 6B.6 to 6B.9:
    • (d) the connection charge reconciliation methodology requirements in clauses 6B.10 and 6B.11.
  • (3) Despite subclause (1), a distributor is—
    • (a) not required to apply the pioneer scheme pricing methodology requirements in respect of real estate developments; and
    • (b) in respect of any connection covered by a large connection contract as defined in the EDB IMs, required to apply the connection charge reconciliation methodology requirements only.
  • (4) A distributor must not refuse to connect a person to the distributor’s distribution network for the purpose of avoiding compliance with the mandatory connection pricing methodologies.

Connection enhancement cost allocation requirements

6B.4

Connection enhancement cost allocation requirements

  • (1) Subject to subclauses (2) to (4), each distributor in determining the connection charges that it requires a connection applicant to pay for or in respect of a connection or any increase in security or capacity at a point of connection or for an asset—
    • (a) must determine those connection charges on the basis of the relevant minimum scheme, unless the connection applicant agrees in writing to modifications to the relevant minimum scheme; and
    • (b) if modifications are made to the relevant minimum scheme, must allocate only the customer-selected enhancement costs to the connection applicant, in addition to the costs of the relevant minimum scheme; and
    • (c) must not allocate any distributor-selected enhancement costs to the connection applicant.
  • (2) If a connection applicant and distributor agree in writing that the distributor does not need to determine the cost of the relevant minimum scheme, the distributor does not need to determine charges in accordance with subclause (1).
  • (3) If a connection applicant and distributor agree in writing to an alternative allocation of connection enhancement costs than set out in subclause (1), the distributor does not need to determine charges in accordance with subclause (1).
  • (4) If a distributor publishes posted connection charges, it may use those charges to determine the charges under subclause (1), instead of applying subclauses (1)(a) to (1)(b), where the connection is of the type and meets the requirements specified by the distributor for the posted connection charge.
  • (5) If a distributor publishes posted extension rates, it must use those rates to determine the costs under a relevant minimum scheme or for any customer-selected enhancement costs, where the connection works are of the type and meet the requirements specified by the distributor for the posted extension rate, unless otherwise agreed in writing with the connection applicant.

Capacity costing requirements

6B.5

Capacity costing requirements

  • (1) If a distributor intends to include or includes network capacity costs (in whole or in part) in the charges payable by a connection applicant for or in respect of any connection works, it must—
    • (a) determine a posted capacity rate for each network tier and network costing zone in respect of which it charges for network capacity costs for each current disclosure year and the following four disclosure years on an annual rolling basis; and
    • (b) not revise the posted capacity rates and nominal capacity increments published under paragraph (a) for the current disclosure year and the following disclosure year except to correct errors; and
    • (c) determine the capacity demand assumption for each network tier and network costing zone to which each connection application that it receives relates having reasonable regard to any relevant information provided by the connection applicant; and
    • (d) use the posted capacity rate and capacity demand assumption applicable to each network tier and network costing zone to which the connection application relates to calculate the network capacity costs.
  • (2) If the capacity demand assumption determined by a distributor for a network tier (other than distribution substations and low voltage mains) is greater than 80% of the nominal capacity increment for that network tier, the distributor may use estimated capacity upgrade costs for that network tier instead of the posted capacity rate in the calculation under subclause (1)(d).
  • (3) If the distributor determines that the estimated cost per unit to add capacity at a network tier is more than 150% or less than 80% of the applicable posted capacity rate for that network tier and network costing zone, the distributor may use the estimated rate instead of the posted capacity rate in the calculation under subclause (1)(d).
  • (4) This clause does not apply to any connection application received by a distributor prior to 1 April 2027.
  • (5) Subclause (1)(b) does not apply with respect to posted capacity rates and nominal capacity increments for the disclosure year ending 31 March 2028.

Pioneer scheme pricing methodology requirements

6B.6

Distributors must develop a pioneer scheme policy

  • (1) Each distributor must develop a pioneer scheme policy by 1 April 2026.
  • (2) The pioneer scheme policy must set out how the distributor will apply the requirements in clauses 6B.7 and 6B.8, including how it will—
    • (a) determine whether a pioneer scheme exists; and
    • (b) determine the matters in clause 6B.7(1)(b) and (3); and
    • (c) otherwise administer pioneer schemes.

6B.7

Requirements for a pioneer scheme

  • (1) For the purposes of clause 6B.6, this clause and clause 6B.8—
    • (a) a pioneer scheme continues from its start date until the expiry date set by the distributor, which must be not less than 7 years from the start date, unless each pioneer to the pioneer scheme and the distributor agree in writing that the scheme shall cease at an earlier date; and
    • (b) a distributor may determine which persons, other than the first pioneer, are subsequent pioneers.
  • (2) For the purposes of this clause and clause 6B.8, a distributor must—
    • (a) determine whether a pioneer scheme exists in accordance with this Part and its pioneer scheme policy; and
    • (b) record the location on its network that the pioneer scheme covers.
  • (3) Each distributor must determine for each pioneer scheme additional or more detailed pricing methodologies to those set out in clause 6B.8 specifying how it will, in a way that is consistent with clause 6B.8,—
    • (a) administer and collect pioneer scheme contributions; and
    • (b) determine and apply rebates; and
    • (c) determine which persons are eligible for rebates.
  • (4) A distributor must treat all connection applicants that connect to pioneering connection works or vested pioneering works as subject to the relevant pioneer scheme.
  • (5) If a pioneer scheme is an acquired pioneer scheme, the purchasing distributor—
    • (a) must not change any aspect of the matters determined for the pioneer scheme by the selling distributor or the pioneer scheme policy for that scheme set by the selling distributor, unless each pioneer to a pioneer scheme and the distributor agree in writing to a change; and
    • (b) must continue to administer, and comply with, those requirements and that pioneer scheme policy in complying with this clause and clauses 6B.8 and 6B.9.

6B.8

Determining connection charges, contributions and rebates for pioneer schemes

  • (1) From 1 April 2026, where there is a pioneer scheme, the distributor must, in determining connection charges and, where applicable, any other charges, for—
    • (a) the first pioneer to the scheme, comply with subclause (2); and
    • (b) for each subsequent pioneer to the scheme and each other connection applicant that connects to the pioneering connection works or vested pioneering works covered by the scheme, comply with subclause (3).
  • (2) The distributor must, in determining the connection charges and any other charges payable by the first pioneer to a pioneer scheme—
    • (a) from the time that any other pioneer or other connection applicant connects to the pioneering connection works or vested pioneering works covered by the scheme, apply a rebate determined in accordance with subclause (5); and
    • (b) otherwise comply with its pioneer scheme policy and the matters determined under clause 6B.7; and
    • (c) determine the costs of the pioneering connection works or vested pioneering works in accordance with subclause (4)(a).
  • (3) The distributor must, in determining the connection charges and any other charges payable by each subsequent pioneer or other connection applicant that connects to the pioneering connection works or vested pioneering works covered by a pioneer scheme—
    • (a) comply with the pioneer scheme contribution requirements set out in subclause (4); and
    • (b) in the case of a subsequent pioneer, from the time that any other pioneer or other connection applicant connects to the pioneering connection works or vested pioneering works covered by the scheme, apply a rebate determined in accordance with subclause (5); and
    • (c) otherwise comply with its pioneer scheme policy and the matters determined under clause 6B.7.
  • (4) The pioneer scheme contribution is to be determined as follows:
    • (a) in determining the costs of the pioneering connection works or vested pioneering works—
      • (i) the distributor must use the actual costs if these are known to the distributor;
      • (ii) if the actual costs are not known to the distributor (for example, if the pioneering connection works or vested pioneering works were constructed or contracted by a person other than the distributor), the distributor may use its estimated costs of the works;
      • (iii) if the distributor is using information provided by the consumer who constructed or paid for any vested pioneering works, the distributor must be reasonably satisfied that the information is accurate;
      • (iv) the distributor must exclude the costs of any connection enhancement or equivalent costs in respect of vested pioneering works;
      • (v) the distributor must include the costs incurred by a pioneer under any other pioneer scheme covering any part of the distributor’s network that the pioneering connection works or vested pioneering works directly connect to:
    • (b) the distributor must apply straight-line depreciation to the costs of the pioneering connection works or the vested pioneering works that the pioneer scheme relates to determine the present-day value of those costs each time it calculates pioneer scheme contributions, using a depreciation period of 20 years:
    • (c) the distributor must take into account distance (along an extension) and capacity of each pioneer or connection applicant that connects to pioneering connection works:
    • (d) pioneer scheme contributions must not be collected if the pioneer scheme contribution would be less than the amount of $1,000 in December 2025 terms adjusted each year by the CPI movement after deducting any fee to cover the reasonable costs of administering the scheme, or of a lesser amount specified by the distributor.
  • (5) The rebate due to a pioneer must be determined in a way that shares any pioneer scheme contribution received by a distributor among all pioneers covered by the pioneer scheme proportionate to the extent to which each pioneer has met the costs of the pioneering connection works or the vested pioneering works and after deducting any fee to cover the reasonable costs of administering the scheme.
  • (5A) If a rebate is unable to be paid to a pioneer because the pioneer cannot be located after a reasonable attempt has been made by the distributor do so—
    • (a) the distributor must take reasonable steps to repay the corresponding amount of pioneer scheme contributions already collected to those that paid it, in proportion to their contribution; and
    • (b) the distributor may retain any amount that cannot be repaid in accordance with paragraph (a); and
    • (c) pioneer scheme contributions that would have been paid to the missing pioneer under the pioneer scheme must no longer be collected.
  • (6) A distributor must determine whether and in what circumstances the status of first pioneer or subsequent pioneer may transfer to a different person or persons (for example, where the status is to be apportioned between multiple people).
  • (7) This clause does not apply to a pioneer scheme entered into before 1 April 2026.

Clause 6B.8(4)(a)(iii): amended on 1 April 2026, by clause 5(1) of the Electricity Industry Participation Code (Connection Pricing Related Amendments) Amendment 2026.

Clause 6B.8(4)(a)(iv) and (v): inserted on 1 April 2026, by clause 5(2) of the Electricity Industry Participation Code (Connection Pricing Related Amendments) Amendment 2026.

Clause 6B.8(5A): inserted on 1 April 2026, by clause 5(3) of the Electricity Industry Participation Code (Connection Pricing Related Amendments) Amendment 2026.

6B.9

Distributors must publish information on pioneer schemes

  • (1) Each distributor must—
    • (a) publish its pioneer scheme policy, which must include how it will;—
      • (i) determine pioneer scheme contributions; and
      • (ii) administer and collect pioneer scheme contributions; and
      • (iii) determine and apply rebates; and
      • (iv) determine which persons are eligible for rebates; and
      • (v) distribute funded asset rebates it receives in accordance with clause 29 of the transmission pricing methodology relating to incremental transmission works to pioneers; and
      • (vi) determine whether and in what circumstances the status of first pioneer or subsequent pioneer may transfer to a different person or persons; and
    • (b) make each connection applicant aware of the existence of the pioneer scheme policy;
    • (c) publish the details of each pioneer scheme it administers, applying the requirements in clause 6B.7, including the following information:
      • (i) the part of its network that the pioneer scheme covers:
      • (ii) the start date of the pioneer scheme:
      • (iii) the expiry date of the pioneer scheme:
      • (iv) the relevant opening value(s) of the pioneering connection works, vested pioneering works, or parts of these works covered by the pioneer scheme.
  • (2) Subclause (1)(c) does not apply to a pioneer scheme entered into before 1 April 2026.

Connection charge reconciliation methodology requirements

6B.10

Distributor must provide connection charge reconciliation on request

  • (1) If requested by a connection applicant during the connection process, or as otherwise required under subclause (2), a distributor must provide a written connection charge reconciliation.
  • (2) A distributor must, when providing a quote for the connection charge or connection charges, in respect of any connection works, either—
    • (a) provide a written connection charge reconciliation; or
    • (b) notify the connection applicant of their right to request a written connection charge reconciliation under this clause.
  • (3) If requested by the Authority, a distributor must—
    • (a) provide information on connection charge reconciliation amounts to the Authority; and
    • (b) if requested, provide sufficient information under paragraph (a) to enable the Authority to understand how the distributor determined those amounts; and
    • (c) provide the information requested under this subclause in the form, manner, and at the time and/or frequency specified by the Authority.

Clause 6B.10(3)(a): amended on 1 April 2026, by clause 6(1) of the Electricity Industry Participation Code (Connection Pricing Related Amendments) Amendment 2026.

Clause 6B.10(3)(b): amended on 1 April 2026, by clause 6(2) of the Electricity Industry Participation Code (Connection Pricing Related Amendments) Amendment 2026.

Clause 6B.10(3)(c): inserted on 1 April 2026, by clause 6(3) of the Electricity Industry Participation Code (Connection Pricing Related Amendments) Amendment 2026.

6B.11

Connection charge reconciliation requirements

  • (1) A connection charge reconciliation must show:

CC = (IC - IR) + NC

where

CC

is the connection charge or connection charges

IC

is the incremental cost estimate

IR

is the incremental revenue estimate

NC

is the network cost contribution.
  • (2) A distributor must assess the incremental cost estimate under subclause (1), and show this assessment in the connection charge reconciliation, in accordance with the following formula:

IC = EC + CSE + NCC + ITC + LHCR + OCL

where

IC

is the incremental cost estimate

EC

is the extension cost of the relevant minimum scheme, excluding any incremental transmission cost

CSE

is the customer-selected enhancement costs, if any

NCC

is the network capacity cost of the relevant minimum scheme calculated in accordance with clause 6B.5, including in respect of a connection application received by a distributor prior to 1 April 2027 as though that clause applied to the connection application

ITC

is the incremental transmission cost, if any

LHCR

is the localised historical cost recovery, if any

OCL

is the operating cost loading, if any.
  • (3) A distributor must assess the incremental revenue estimate under subclause (1), and show this assessment in the connection charge reconciliation, in accordance with the following formula:

IR = IDR + ITR

where

IDR

is the incremental distribution revenue estimate

ITR

is the incremental transmission revenue estimate.
  • (4) A distributor must assess the incremental distribution revenue and incremental transmission revenue estimates, and show this assessment in the connection charge reconciliation, by—
    • (a) estimating revenue from electricity lines services (excluding connection charges and connection administration fees) the distributor will receive in respect of the connection in the first disclosure year (or part disclosure year) following the electrical connection of the connection or the completion of the connection works, whichever is later; and
    • (b) estimating revenue for subsequent disclosure years by adjusting the estimate derived under paragraph (a) for—
      • (i) change from part-year to full-year, if applicable; and
      • (ii) forecast changes in demand at the connection (if any); and
      • (iii) forecast changes in revenue per connection, in real terms, for any years for which the distributor has a reasonable revenue path forecast; and
      • (iv) forecast changes in tariff structures or levels for any years for which the distributor has a reasonable price path forecast; and
    • (c) discounting the estimates under paragraph (b) to their present value using—
      • (i) a duration from the beginning of the first full year of operation equal to the connection revenue life; and
      • (ii) a discount rate equal to the most recent available mid-point estimate of vanilla WACC (being the weighted average cost of capital) made by the Commerce Commission in accordance with the EDB ID determination made under Part 4 of the Commerce Act 1986 less an adjustment to remove inflation consistent with inflation projections for the year ahead from the most recent Monetary Policy Statement published by the Reserve Bank of New Zealand at the time of that mid-point estimate of vanilla WACC; and
    • (d) for incremental distribution revenue only, and only where the incremental cost estimate includes an operating cost loading which is zero, multiplying the amount derived after the application of paragraph (c) by the distributor’s incremental opex scaling factor calculated in accordance with subclause (5).
  • (5) A distributor must calculate its incremental opex scaling factor, and show this calculation in the connection charge reconciliation, in accordance with the following formula:
\[ OSF = 1-\frac{ASO}{AEDR} \]

where

OSF

is the incremental opex scaling factor

ASO

is the average selected opex, being the average value over the five most recent available disclosure years of the sum of a distributor’s—

  • (a) operational expenditure relating to service interruptions and emergencies as defined in the EDB ID determination; and
  • (b) operational expenditure relating to vegetation management as defined in the EDB ID determination; and
  • (c) operational expenditure relating to routine and corrective maintenance and inspection as defined in the EDB ID determination; and
  • (d) any costs, other than an amount or charge payable to Transpower, described in clause 3.1.2(1)(a) of the EDB IMs

AEDR

is the average electricity distribution revenue, being the average value over the five most recent available disclosure years of a distributor’s distribution line charge revenue (excluding revenue relating to pass through of electricity transmission costs)
  • and where all values must exclude goods and services tax and be expressed in real terms (with a common base year).
  • (6) A distributor may further adjust the calculation of the amounts of the CC, IC and IR in subclauses (1) and (2), as applicable, to recognise differences in the timing of cashflows using a discount rate for each year consistent with the rate determined in subclause (4)(c)(ii).
  • (7) A distributor must treat in-kind contributions consistently as between CC and IC (either both zero or both the same estimated value).

Clause 6B.11(4)(c)(ii): amended on 1 April 2026, by clause 7(1) of the Electricity Industry Participation Code (Connection Pricing Related Amendments) Amendment 2026.

Clause 6B.11(4)(d): amended on 1 April 2026, by clause 7(2) of the Electricity Industry Participation Code (Connection Pricing Related Amendments) Amendment 2026.

Clause 6B.11(5): amended on 1 April 2026, by clause 7(3) of the Electricity Industry Participation Code (Connection Pricing Related Amendments) Amendment 2026.

Disputes about the application of this Part

6B.12

Disputes between distributors and connection applicants that are participants

  • (1) If there is a dispute between a connection applicant that is a participant and a distributor about the application of any of the mandatory connection pricing methodologies, either participant may commence the default dispute resolution process in Schedule 6.3 at any time.
  • (2) Subclause (1) does not apply to disputes about the following clauses:
    • (a) Clause 6B.5(1)(a) to (b) (requirements relating to network capacity costs):
    • (b) Clause 6B.6 (requirement to develop a pioneer scheme policy):
    • (c) Clause 6B.7 (requirements for a pioneer scheme):
    • (d) Clause 6B.9 (requirement to publish information on pioneer schemes):
    • (e) Clause 6B.10(3) (requirement to provide information to the Authority on connection charge reconciliation amounts).

6B.13

Disputes between distributors and connection applicants that are not participants

  • (1) If a connection applicant that is not a participant is in a dispute with a distributor about the application of this Part, other than a dispute about any of the clauses listed in clause 6B.12(2), and has notified the distributor of the dispute, the distributor must attempt to resolve the dispute in good faith.
  • (2) For the avoidance of doubt, nothing in this clause prevents the connection applicant from reporting a breach or possible breach of this Code under regulation 9 of the Electricity Industry (Enforcement) Regulations 2010 or from making a complaint to the distributor under regulation 5 of the Electricity Industry (Enforcement) Regulations 2010 at any time.