Distribution connection pricing reform

Distribution connection pricing proposed Code amendment

Upcoming Open Closed Decision
View cross-submissions Cross-submissions closed 24 January 2025
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Decision

We are progressing four of the five measures we proposed to improve pricing methodologies for connecting to the network. The four pricing methodology requirements are:

  • enhancement cost allocation
  • network capacity costing
  • pioneer scheme
  • connection charge reconciliation.

These new requirements for distributors (lines companies) are a significant step towards more efficient connection pricing, making it easier for businesses and important infrastructure to get connected. They will encourage efficient investments and enable New Zealanders to enjoy the benefits of these investments sooner.

The new requirements apply to quotes for distribution network connections for load applications received from 1 April 2026. The exception is the requirement to use published rates to allocate upstream costs to access seekers as headroom is consumed. This requirement applies to quotes received on and after 1 April 2027.

The new requirements are also supported by a dispute resolution process.

Please see the ‘Resources’ section of this webpage for guidance documents and other supporting material about these new requirements.

This set of new requirements is an important first step in our work to improve connection pricing methodologies.

See Distribution connection pricing reform for more information about this longer-term project.

Remaining proposals to be further considered

We have decided to further consider the remaining proposal to introduce ‘reliance limits’ to prevent already high up-front charges from increasing further.

We are also further considering the obligation on distributors to connect all applications that meet certain criteria. This obligation is part of the decisions on the related ‘Network connections project’.

More time is needed to consider these related issues, with input from the sector, to ensure any rule changes lead to the best possible long-term outcomes for all parties, including all New Zealanders.

Technical consultation now open

Our next step is to seek feedback on the draft wording of the new rules to ensure it accurately reflects the decisions.

We invite you to read the consultation and share your feedback on the draft Code included in the decision paper by 5pm, 1 August 2025.

Decision paper

Distribution connection pricing Code amendment - Decision paper

Distribution connection pricing Code amendment - Decision paper

Factsheet - summary of new requirements and modifications made to original proposals following feedback.

Webinar

We held a webinar on Friday 18 July to talk through the decisions and answer questions. The webinar also included a presentation about related decisions on distribution connection pricing.

Watch the webinar or read the slidepack

Consultation

In late 2024, we sought feedback on a package of proposals that aim to make significant progress towards efficient connection pricing.

Making connection pricing methodologies more efficient means connection activity covers its costs while not being inefficiently deterred, and pricing encourages efficient investment in connections and upstream capacity and network development.

In recognition of the scale, complexity and impact on distributors of full reform, we are taking a phased approach to regulating efficient pricing methodologies.

Consultation paper

Distribution connection pricing proposed Code amendment - consultation paper

Distribution connection pricing proposed Code amendment - consultation paper

Webinar

We held a webinar on Monday 11 November 2024 to talk through our proposals and answer questions. The webinar included a presentation about the related Network connections project - Stage one consultation with proposals about the application process for new and enlarged connections. Watch the webinar and read the Q&As.

Related consultation

Alongside this consultation, we welcomed feedback in the Network connections project – Stage one consultation.

This consultation ran over the same time period and aims to improve the efficiency of the application processes for connecting to the network, or upgrading an existing connection.

Together, the proposals across these consultations aim to support more efficient investment in infrastructure and businesses, and in distribution networks.

Together, the proposals across these consultations aim to support more efficient investment in infrastructure, businesses and new housing developments, and in distribution networks.

Correspondence

Submissions

Download all submissions (.zip)

Cross-submissions

Download all cross-submissions (.zip)