Distribution pricing reform next steps

We’ve published an update on the key areas of focus for our work on distribution pricing reform. The paper provides a detailed outline of the direction we are heading with this work and in doing so, provides certainty of next steps.

Distribution pricing has a significant role to play in guiding existing network users, individuals or organisations seeking a network connection (access seekers) and distributors to choose how they invest in and use the network. We have decided to develop, for consultation, a draft Code amendment to mandate efficient connection pricing.

This will require input from industry on workability; so, we are also creating a new technical group, the Distribution Connection Pricing Technical Group, to capture industry and stakeholder knowledge to inform our work. We will be calling for nominations for members for the Distribution Connection Pricing Technical Group this Friday 10 May 2024. We welcome participation by interested stakeholders.

This Friday we will also publish the terms of reference for the Distribution Connection Pricing Technical Group and membership application form on our website and in our Market Brief newsletter. We will then invite you to send nominations to distribution.pricing@ea.govt.nz.

Network connections are a key enabler for the electrification of the economy. We want to see greater investment, innovation, and transparency in the system. We’re aiming to future proof network infrastructure to support electrifying New Zealand. To progress this, we’re investigating avenues to consult with industry, stakeholders, and interested parties on a potential Code amendment to regulate how capital contributions or connection charges are set for individuals or organisations seeking access to connect to networks.

In addition, we also intend to publish an open letter to distributors with further guidance on efficient distribution pricing methodologies and efficient price signals. The letter will remind distributors of our expectations as we work with stakeholders on next steps for distribution pricing.

We want distribution pricing to send the right signals about the cost of the electricity that’s being fed to homes and businesses. Accurate price signals will enable better use of the electricity network, encouraging consumers and businesses to consider using new technologies to manage congestion when the network is fully used.

More information

Distribution Pricing Reform - Next steps

Distribution pricing project