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Enabling investment and innovation

Distribution connection pricing reform

We are improving connection pricing methodologies so they are more efficient and consistent across distributors.

  • Distribution
  • Code

    • Overview

    There have been limited rules about how distributors develop and structure their pricing for energy users (load) looking to connect to the network or upgrade existing connections (connection applicants).

    In some places, this is leading to high up-front costs for those wanting to connect. Excessive up-front costs may deter businesses, new infrastructure or housing developments, or push up the costs of those developments that then get passed onto consumers.

    In some cases, some connection applicants face inefficiently low up-front costs, which means others on the network are subsidising the true costs of new connections.

    Under the existing rules, each distributor can develop their own pricing methodologies. This can add costs and complexity for connection applicants whose businesses extend across regions.

    We want to develop rules that make it easier to get electrified businesses and infrastructure up and running, and that deliver good outcomes for consumers, the economy and the environment.

    If we don’t, we expect the current settings will result in higher up-front costs, more inefficiencies, less investment, fewer developments, slower electrification, slower decarbonisation – and everyone losing out in the long run.

    Full reform of connection pricing methodologies will take time due to its complexity and deep interactions with distributors’ business operations and network management.

    A phased approach allows us to address some known issues more quickly.

    Following consultation, we are implementing a package of fast-track measures to make significant progress towards efficient pricing, while laying the foundation for further regulatory change.

    Alongside this work, our Network connections project is making the process for new and upgraded connections to the network more efficient.

    Timeline

    Past activity

    Resources

    July 2025 – summary of new requirements and modifications to original proposals factsheet

    August 2025 - guidance documents to support distributors implementing the new requirements:

    These documents may be updated as we engage with distributors over the coming months. If you would like to be informed of any additions or refinements, or other news relating to this work, please email connection.feedback@ea.govt.nz with ‘subscribe’ in the subject line.

    Project background

    As part of New Zealand’s electrification, more energy users – such as industrial plants, big businesses, new data centres, EV charging stations and new housing developments – are seeking new or larger connections directly to the distribution network.

    Getting the rules around connection pricing methodologies right is one essential building block to support the growth of businesses and critical infrastructure, and efficient electrification of the economy.

    We consulted on distribution pricing in July 2023. In May 2024, we outlined our intentions to develop a proposed Code amendment for connection pricing in our ‘Distribution Pricing Reform: Next Steps’ paper. We were concerned that inefficiently high up-front charges are a barrier for new consumers looking to connect to the network, or existing consumers wanting to upgrade their connections.

    In June 2024, we announced a technical group of industry representatives to assist with testing the workability of our proposed Code amendments and their implementation.

    We consulted on five ‘fast-track’ proposals in late 2024, which proposed changes as the first steps toward efficient pricing methodologies.

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