Source: Electricity Authority
Excessively high up-front costs to connect to electricity networks can be a barrier to development, slow down electrification and leave New Zealanders worse off, says the Electricity Authority Te Mana Hiko (Authority).
“Electricity is key to a growing and thriving economy,” says Authority General Manager Networks and System Change Tim Sparks. “But high costs to connect to networks can have an impact on new housing and commercial developments, EV charging stations and other critical infrastructure.
“Reducing very high up-front charges would help enable and encourage efficient development. Not only is this good for the economy, it means the network costs would be shared among more people on the network.
“We’re seeking feedback on our proposal to rein in excessively high connection costs, which are a known problem in some parts of the country,” Sparks said.
“We think people should pay all their costs for connecting to networks over time, as well as their share of other network costs. However, data indicates a small number of lines companies have been requiring newly connecting customers to pay more than their share.”
“The proposal is targeted so we would intervene only where it’s needed. Most of the 29 lines companies – and their customers – wouldn’t be affected.
“We acknowledge this proposal could mean the few lines companies that would be affected respond by increasing their lines charges for existing customers on their network. We expect this increase would be very small. As an illustrative example, in Auckland we estimate existing households could initially face an increase of between 22 cents and 66 cents a month.”
This proposal complements other Authority rule changes coming into effect next year to make connection pricing methodologies more efficient, transparent and consistent across regions, and to make connecting to the network easier and faster.
At the same time, the Authority is seeking feedback on its proposed approach to introduce obligations for when lines companies must offer and maintain connections to their networks.
“Electricity is an essential service. We think there should be some obligations for when lines companies must supply electricity. This would provide greater clarity from the outset about lines companies’ obligations for connections. We look forward to receiving feedback,” Sparks said.
The proposed new rules would be an interim solution ahead of further potential changes to improve connection pricing efficiency across the board.
Submissions on these proposals by 5pm, Friday 19 December 2025.
For more information:
Customer impacts
The potential customer impacts of the targeted pricing intervention exclude GST and have been modelled for the years beginning 1 April 2028 and 1 April 2029 when changes to excessive up-front costs could come into play. The Authority anticipates possible further reform of connection pricing methodologies to come into effect from 1 April 2030 to tie in with the Commerce Commission’s price setting for distributors for 2030-2035. Longer-term modelling of potential customer impacts of this proposal will be released in the coming weeks.
Background
In July 2025, the Authority announced two sets of rule changes to improve connection pricing methodologies and the application processes for connecting to networks. Following feedback, decisions were deferred at the time on the two issues these proposals aim to address.
The Electricity Authority is an independent Crown Entity with the main statutory objective to promote competition in, reliable supply by, and the efficient operation of, the electricity industry for the long-term benefit of consumers. The additional objective of the Authority is to protect the interests of domestic consumers and small business consumers in relation to the supply of electricity to those consumers.
