New rules target high charges to connect to electricity networks

Lines companies’ charging approaches for connecting to their networks will come under scrutiny following new rules announced today by the Electricity Authority Te Mana Hiko (Authority).

From 1 August 2026, the Authority will implement a new framework under the Electricity Industry Participation Code 2010. This enables the Authority to examine lines companies’ pricing methodologies and require them to be adjusted for consistency with the new pricing methodology in the Code.

“The Authority considers some people are paying very high up-front charges to connect to their local network, without any offsetting cut in their on-going lines charges. This means they’re paying more than their share, which can discourage efficient network connections,” says Authority General Manager Tim Sparks.

Data indicates up-front connection charges in some areas are projected to rise even further.

“Increasing up-front charges can be a barrier to efficient connections. This slows electrification and deters developments of EV charging stations, housing, commercial buildings and other infrastructure. It can also stunt network growth. This means fewer people connect and the fixed costs of the network aren’t shared as widely.

“These new rules should put the brakes on high up-front connection charges, stopping them from increasing further than needed and in some cases, it may bring them down.

“The new rules will allow for a targeted approach. We will intervene only where there’s evidence of a problem. However, while most lines companies won’t be directly affected, the new rules and the possibility of intervention should help keep their up-front connection charges in check.

“The new rules are an important step towards promoting efficiency. They create a better environment for efficient connection growth by protecting connection applicants from facing higher up-front charges than needed. At the same time, they help ensure everyone on the network benefits from each new connection. They’re intended as an interim measure while we consider a more comprehensive and enduring solution,” Sparks said.

The Authority is preparing to implement the new rules from 1 August 2026 and will issue guidance to help lines companies comply.

These changes are part of the Authority’s broader work programme to make lines companies’ connection charges more efficient, transparent and nationally consistent, and support good outcomes for all consumers in the long term. The first set of rule changes, the 'fast-track' measures, came into effect from 1 April 2026. These were designed to quickly address some known issues and lay the foundation for further reform.

The Authority is now looking at the next stage of this work. An issues paper will be released on 13 July seeking feedback on possible areas for reform, including options for a longer-term solution to address inefficiently high up-front connection charges.

As part of today’s decision, the Authority has also confirmed its preferred approach for clarifying when lines companies must provide new connections. This is an early step towards developing clearer rules on when lines companies must offer and maintain connections. The Authority has decided to allow the recently introduced rules to become established before progressing this work. It will monitor lines companies’ supply of new connections and revisit this approach if needed.

The Authority has also decided to amend the discount rate lines companies need to use from 1 October 2026 as part of their connection charge reconciliations.

For more information

Read the Electricity Authority’s webpage for more about these decisions.

Register to join our webinar at 10am, 13 July 2026 for an overview of our work to date to reform distribution connection pricing and the issues paper that explores options for further reform.