Reducing barriers for new connections: WACC estimate for connection charge reconciliation
Decision
From 1 April 2026, distributors need to provide a standardised breakdown of connection charges to the Authority and connection applicants on request.
This breakdown (reconciliation) must include incremental costs, incremental revenue and network costs, and be updated annually and adjusted for inflation.
We initially proposed distributors use the mid-point estimate of the weighted average cost of capital as part of this requirement.
Following consultation in March 2026, we decided distributors must use annually updated estimate of WACC for the percentile adopted for price-quality regulation of distributors subject to a default price-quality path. At the time of publication (1 July 2026), this is the 65th percentile.
Distributors must use this estimate in their connection charge reconciliations from 1 October 2026.
This change will improve consistency between the two regulatory regimes. and help keep total system costs as low as possible.
Submissions
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Contact Energy2 pages
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ENA3 pages
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MEUG1 page
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Orion2 pages
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Unison Networks and Centralines4 pages
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Wellington Electricity4 pages