Updated Code for new connection pricing rules; further amendment for consultation

We have made minor Code amendments for the four new requirements relating to distributors’ connection pricing methodologies, which take effect from 1 April 2026.

The amendments clarify the Code so it more accurately reflects the intent of the new requirements announced in July 2025.

Our decisions on the Code follow the consultation on Reducing barriers for new connections from November 2025 to February 2026. That consultation also sought feedback on related issues for connection pricing and distributor obligations relating to connections.

Decisions

Submissions showed general agreement for our proposed changes. We are proceeding with the minor amendments to the Code as set out in Part C of the consultation paper.

In response to feedback, we are considering developing further guidance to support distributors implementing these new requirements.

We have decided on a further minor and technical amendment to the Code to enable the Authority to specify the form, manner, time and frequency that distributors must comply with when providing connection charge reconciliation data.

We have developed disclosure requirements that distributors must adopt to comply with this requirement. The requirements will standardise how the information is shared with the Authority.

Distributors have worked together to design the format and calculation template for the connection charge reconciliation. We expect the form will be available in the ‘resources’ section of the Distribution connection pricing reform webpage later this week.

The decision paper outlines the feedback we received, our response and final decisions for these amendments.

Reducing barriers for new connections: distribution connection pricing reform minor Code amendments’ decision paper

We are currently analysing submissions received on the remaining proposals in the consultation paper (Parts A and B).

Further consultation

Following feedback from a submitter, we are also seeking views on changing the weighted average cost of capital (WACC) percentile that distributors will need to use when calculating the connection charge reconciliation.

The WACC to be used for the connection charge reconciliation must be updated annually and adjusted for inflation.

We initially proposed distributors use the mid-point estimate of the WACC. However, we are consulting on whether the 65th percentile would be more appropriate as it aligns with the Commerce Commission’s percentile of the estimate of the WACC when setting regulatory allowances.

We consider this proposed change would improve consistency between the two regulatory regimes and help keep total system costs as low as possible.

We invite submissions on this proposal to connection.feedback@ea.govt.nz by 5pm, 20 March 2026.

Further information on the proposed change and how to make a submission are on our website: Reducing barriers for new connections: WACC adjustment for reconciliation

Decisions about the proposed WACC calculations are expected towards the middle of this year. While we seek views on the proposed amendment to WACC percentile, distributors should adopt the estimate consistent with the Code that applies from 1 April 2026.