Distribution connection pricing proposed Code amendment

Upcoming Open Closed Decision

View cross-submissions Cross-submissions closed 24 January 2025

Decision

We have decided to progress 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 are for lines companies and 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.

These changes are an important first step in our work to improve connection pricing methodologies.

Resources

For help to implement the new requirements, see:

guidance and worked examples in the ‘Resources’ section on the Distribution connection pricing reform webpage
frequently asked questions

Refining the Code

In July 2025, we sought feedback on the draft wording of the new rules in the Electricity Industry Participation Code to ensure it accurately reflects these decisions.

Following feedback, we amended the proposed wording to better align the new Code to drafting conventions, improve clarity and remove additional or unnecessary wording. Some other amendments give clearer effect to the policy intent outlined in the decision paper. The amendments are detailed in the addendum to the decision paper as part of the Connection pricing requirements Code amendment.

We consulted on a small number of further minor Code updates from November 2025 to February 2026 to further ensure the wording accurately reflects the decisions. Our decisions are set out in the decision paper: Distribution connection pricing reform – minor Code amendments

Remaining proposals to be further considered

We are continuing to look at options to prevent already high up-front charges from increasing. 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’.

We consulted on these two issues from November 2025 to January 2026. View reducing barriers to new connections consultation

Decision paper

Distribution connection pricing Code amendment - Decision paper

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.

Our webinar in November 2024 presented these proposals and 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.

Consultation paper