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This
legislation is administered by the Electricity Authority. For more
information please see: Website: https://www.ea.govt.nz/ Contact
phone: +64 4 460 8860 Contact
address: PO Box 10041, Wellington 6143 |
Electricity Industry Participation Code (Connection Charge Balance
Point Principle and Reconciliation) Amendment 2026
This amendment to the Electricity Industry Participation Code 2010 (Code) is made under section 38 of the Electricity Industry Act 2010 (Act) by the Electricity Authority having complied with section 39 of the Act.
Amendment
1 Title
This is the Electricity Industry Participation Code (Connection Charge Balance Point Principle and Reconciliation) Amendment 2026.
2 Commencement
This amendment comes into force on 1 August 2026, except for clause 5 which comes into force on 1 October 2026.
3 Code amended
This amendment amends the Electricity Industry Participation Code 2010.
Part 1
Amendments to Part 1 of the Electricity Industry
Participation Code
4 Clause 1.1 amended (Interpretation)
In clause 1.1(1), insert in their appropriate alphabetical order:
connection charge balance point principle means the pricing methodology in clause 6B.11A
shared network costs means the costs of a distribution network that are not incremental to a single connection, including the cost of—
(a) communal network development (eg, historical reticulation and grid connection); and
(b) renewal of older connections; and
(c) other shared business and network assets and operating expenses (including network capacity costs)
Part 2
Amendments to Part 6B of the Electricity Industry
Participation Code
5 Clause 6B.11 amended (Connection charge reconciliation requirements)
Replace clause
6B.11(4)(c)(ii) with:
(ii) a discount rate equal to the most recent available estimate of vanilla WACC (being the weighted average cost of capital) determined by the Commerce Commission under clause 2.4.5(4) of the EDB IMs 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 the determination is published by the Commerce Commission; and
6 New clauses 6B.11A to 6B.11C and cross-heading inserted
After clause 6B.11, insert:
Connection charge balance point principle pricing
methodology
6B.11A Connection charge
balance point principle pricing methodology
(1) The connection charge balance point principle is the principle that a distributor’s pricing methodologies should provide that the contribution to shared network costs from new connections and upgraded connections is commensurate with the contribution from existing connections.
(2) Contributions are commensurate when—
(a) the costs of new connections and upgraded connections are not subsidised by existing connections; and
(b) new connections and upgraded connections otherwise make a similar (or lower) contribution to shared network costs as similar existing connections.
(3) Contributions include connection charges and lines charges, including forecast lines charges.
6B.11B Consequence of not applying
connection charge balance point principle
(1) If the Authority considers that a distributor has not applied, or is likely to not apply, the connection charge balance point principle, it must direct the distributor to amend its pricing methodologies to make them consistent with the connection charge balance point principle provided the Authority has identified material efficiency concerns with the distributor’s prices and the costs of the distributor applying the connection charge balance point principle do not outweigh the benefits of doing so.
(2) A direction under subclause (1) may—
(a) provide for the distributor to amend its pricing methodologies in a way that allows for consistency with the connection charge balance point principle to be achieved over time, for example, by changing the allocation of costs between existing and new connections in steps; and
(b) specify a reasonable timeframe or timeframes within which consistency must be achieved; and
(c) specify a timeframe that extends beyond 1 April 2030.
(3) If the Authority issues a direction under subclause (1), the distributor must make its pricing methodologies consistent with the connection charge balance point principle within any timeframes and consistent with any other requirements specified in the direction.
(4) Before issuing a direction under subclause (1), the Authority must, in the following order:
(a) notify the distributor that it is considering close examination of whether to issue a direction in respect of the distributor’s pricing methodologies:
(b) give the distributor sufficient information about the reasons why the Authority is considering close examination, and an opportunity to respond within a reasonable timeframe specified by the Authority before commencing close examination:
(c) following close examination and, if the Authority provisionally decides to make a draft direction, give the distributor—
(i) a draft report setting out the Authority's analysis of why the distributor’s pricing methodologies are not, or will not be, consistent with the connection charge balance point principle; and
(ii) the reasons for the Authority’s proposed direction, proposed timeframes for it to apply and other requirements that the Authority proposes to set under subclause (2); and
(iii) an opportunity to respond within a reasonable timeframe specified by the Authority:
(d) give the distributor an opportunity to voluntarily address the issues identified in the draft report within a reasonable timeframe specified by the Authority.
6B.11C Clauses expire
(1) Clauses 6B.11A and 6B.11B expire on 1 April 2030.
(2) Despite subclause (1), a distributor must continue to ensure that its pricing methodologies are consistent with the connection charge balance point principle until the end of the timeframe specified in a direction given under clause 6B.11B(1).
Made at Wellington on 26
June 2026
Erik Westergaard
Acting Chair
Electricity Authority
Certified in order for
signature:
Nicholai Mumford Nick Crang
Senior Legal Counsel Consultant
Electricity Authority Duncan Cotterill
19 June 2026 25 June 2026
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Explanatory Note
This note is not part of the amendment but is
intended to indicate its general effect.
This
amendment to the Electricity Industry Participation Code 2010 comes into force on
1 August 2026, except for clause 5 which comes into force on 1 October 2026.
The
amendment amends Part 6B of the Electricity
Industry Participation Code 2010 to—
(a) provide for
a new connection charge balance point principle pricing methodology, including
the connection charge balance point principle, which is the principle that a
distributor’s pricing methodologies should provide that the contribution to
shared network costs from new connections is commensurate with the contribution
from existing connections;
(b) empower the
Authority to direct distributors to amend their pricing methodologies to make
them consistent with the principle; and
(c) align
the discount rate calculation used in the connection charge reconciliation
required by clause 6B.11 with the most recent available estimate of vanilla
WACC determined by the Commerce Commission under its input methodology
determination that applies to electricity distribution services.
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This is secondary legislation issued under the authority of the Legislation Act 2019. |
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Title |
Electricity Industry Participation Code (Connection Charge Balance Point Principle and Reconciliation) Amendment 2026 |
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Principal or amendment |
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Consolidated version |
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Empowering Act and provisions |
Electricity Industry Act 2010, section 38 |
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Replacement empowering Act and provisions |
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Maker name |
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Administering agency |
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Date made |
26 June 2026 |
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Publication date |
1 July 2026 |
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Notification date |
1 July 2026 |
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Commencement date |
1 August 2026 |
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End date (when applicable) |
Not applicable |
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Consolidation as at date |
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Related instruments |
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