Information for distributors: connection pricing rules 2026-27

Distributors are required to:

• determine the minimum scheme using their connection and operating standards
• ensure those standards reflect their asset management policies and practices
• use this minimum scheme as the starting point for pricing.

If a higher-cost enhanced design is used, the costs are allocated to whoever selected the enhancements.

The distributor and connection applicant may agree not to apply the above rules or for an alternative method of allocating costs.

Distributors must provide a lower cost ‘flexible’ scheme if a customer requests one, and it can reasonably be supplied. For example, to reduce costs, the customer may offer distributors control of its electricity use or other operating arrangements that help distributors manage load on their networks.

These rules apply to all new connections and upgrades, and bespoke pricing and posted charges. For posted connection charges, the minimum scheme must be applied to a representative connection.

See clause 6B.4 of the Code for more details.

These rules do not apply to connection applicants that use the ‘large connection contracts’ mechanism specified by the Commerce Commission. Refer (6B.3.(3)(b), which is for very large electricity users.

Distributors must generally create a pioneer scheme where a new connection triggers a network extension of more than $50,000 (in December 2025 dollars). A distributor may choose a lower threshold for pioneer schemes on their network.

Under the pioneer scheme, the distributor must:

• recover contributions from subsequent connecting parties that join to an extension paid for by the ‘pioneering’ connection where the contribution is more than $1,000 in NZ2025 dollars (CPI adjusted) after any ‘reasonable’ administration fee has been deducted
• allocate those contributions based on the distance along the extended network and capacity used
• return those contributions (minus any ‘reasonable’ administration fees) to pioneers
• publish their pioneer scheme policy and the details of pioneer schemes on their networks
• administer each scheme for at least 7 years with the value of the original contribution (paid by the ‘pioneer’) depreciating using a 20-year straight line rate.

Real estate developments are currently excluded from the requirement to create pioneer schemes – a distributor can choose to include them.

Pioneer schemes also do not apply to connections that are covered by a large connection contract as defined in the Commerce Commission’s Distribution Services Input Methodologies Determination.

The original pioneer may opt out of the scheme.

See clauses 6B.6 to 6B. 9 of the Code for the full requirements.

When providing a quote, distributors must either provide a reconciliation to the connection applicant, or inform them one can be requested.

This rule applies to all quotes and requotes for new and upgraded connections. It also applies to quotes provided by a third party if the connection applicant asks for it. This is required regardless of whether the quote is accepted.

Reconciliation must include a standardised breakdown of the connection charge, including:

• the incremental cost of providing the connection
• the incremental revenue expected to be recovered over the connection’s revenue life (30 years for residential connections, 15 years for non-residential connections)
• the contribution to shared network costs.

Under clause 6B.10(3), distributors must also provide reconciliation information to the Authority when requested.

The Authority has made a request for reconciliation information. The request, set out in the reconciliation notice, requires distributors to submit data quarterly to the Authority. This must include an individual reconciliation file (one row per quote/requote), and a representative reconciliation file where posted connection charges are used.

Where posted connection charges are used, distributors may:

• provide a representative reconciliation, and
• report the number of applications quoted on that basis.

Distributors must submit both files each quarter, including empty files where required.

The following documents provide further information about the Authority’s requirements for reconciliation information, along with worked examples.

• Load connection charge reconciliation notice – version 2 (June 2026)
• Load connection charge reconciliation notice – version 1 (corrected June 2026, originally published March 2026)

* Following feedback, we updated the Load connection charge reconciliation notice to better reflect distributors’ data inputs. The updated notice is version 2 above. We will accept data provided using either version 1 or version 2 of the notice – as published above on 24 June 2026 – for the first two reporting periods (1 April – 30 June, and 1 July – 30 September 2026). Distributors must use the version 2 format thereafter. Please note, the notice published on 11 March 2026 contained an error and has been removed from our website. If using version 1 please ensure you use the notice named ‘version 1 updated’.

• Worked examples of distribution connection pricing – connection charge calculation
• Worked examples of distribution connection pricing – reconciliation calculations

See clauses 6B.10 and 6B.11 of the Code for more details.

Following consultation, we have amended the Code to provide that distributors must use the Commerce Commission’s annually updated estimate of the weighted average cost of capital as part of this requirement. The updated requirement will apply from 1 October 2026 (as an amendment to clause 6B.11(4)(c)(ii) of the Code).

On 1 April 2026, connection applicants gained access to the same dispute resolution process that applied to connection of distributed generation.

Distributors and connection applicants that are participants must attempt to resolve disputes about in good faith. Where a connection applicant is not a participant, the distributor must attempt to resolve the dispute in good faith.

If the complaint is not resolved, or for non-participants, at any time, it may be referred to the Authority. The Authority will assess whether participants have complied with the Code and initiate enforcement action, if warranted. This can include a warning, approving a settlement, or making a formal complaint to the Rulings Panel.

Read more about the process on the ‘Report a breach’ webpage and see clauses 6B.12 and 6B.13, and Schedule 6.3 for more details.

Distributors retain discretion in how they design and apply their connection pricing methodologies. However, under the Code, from 1 August 2026 the pricing methodologies should be consistent with the ‘balance point principle’.

Applying the balance point principle means charges for new and upgraded connections are not subsidised by existing network users and make a comparable contribution to shared network costs as similar existing connections.

A new three-step process enables the Authority to monitor and enforce compliance. It will:

1. scan each distributors’ connection pricing methodologies
2. closely examine any methodologies where the balance point principle may not be met.
3. direct a distributor to adjust its pricing methodologies for future connections, if action is warranted.

Identified distributors will need to be able to explain how their pricing methodologies meet the balance point principle, including how costs for new connections compare with existing connections of similar customer types and with appropriate data and analysis.

Read clauses 6B.11A to 6B.11C of the Code for more information.

If a distributor includes capacity costs in its connection charges, it must:

• determine capacity demand for each connection in accordance with the requirements in clause 6B.5
• base charges on average costs of adding capacity at each of the five network tiers: sub-transmission line, zone substation, high-voltage feeder, distribution substation, low-voltage mains
• publish capacity cost rates for each network tier for the current disclosure year and next four disclosure years
• ensure rates reflect average costs, with limited exceptions as set out in clause 6B.5 of the Code.

Other requirements:

• Prior to 1 April 2027, any distributor that charges ‘capacity costs’ must include these when providing connection charge reconciliations.
• Distributors may use estimated rates for parts of their networks where ‘capacity costs’ are more than 150% of the posted rate for that particular tier, and also where they are less than 80% of the posted rate.
• Zero rates may be used if the need for future capacity upgrades is unlikely.
• This rule does not apply to very large connections that are covered by a large connection contract as defined in the Commerce Commission’s Distribution Services Input Methodologies Determination.

The worked examples below show how capacity cost rates are calculated and applied in practice across the different network tiers, from local street-level networks through to higher-capacity parts of the system.

• Worked examples of posted capacity rates – guidance document
• Worked examples of posted capacity rates – calculation

Read clause 6B.5 of the Code for more information.