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Distribution connection pricing reform

We are improving connection pricing methodologies so they are more efficient and consistent across distributors.

  • Distribution
  • Code

    • Open consultation

    Reducing barriers for new connections: WACC estimate for connection charge reconciliation

    Cross-submissions due by 8 April 2026

    View consultation

    Overview

    To date, there have been limited rules about how distributors develop and structure their pricing for energy users (load) looking to connect to the network or upgrade existing connections (connection applicants).

    In some places, this is leading to high up-front costs for those wanting to connect. Excessive up-front costs may deter businesses, new infrastructure or housing developments, or push up the costs of those developments that then get passed onto consumers.

    In other cases, some connection applicants face inefficiently low up-front costs, which means others on the network are subsidising the true costs of new connections.

    Under the existing rules, each distributor can develop their own pricing methodologies. This can add costs and complexity for connection applicants whose businesses extend across regions.

    We're developing rules that make it easier to get electrified businesses and infrastructure up and running, and that deliver good outcomes for consumers, the economy and the environment.

    If we don’t, we expect the current settings will result in higher up-front costs, more inefficiencies, less investment, fewer developments, slower electrification, slower decarbonisation – and everyone losing out in the long run.

    Further reform of connection pricing methodologies will take time due to its complexity and deep interactions with distributors’ business operations and network management.

    A phased approach allows us to address some known issues more quickly.

    Following consultation in 2024, we are implementing new rules that make significant progress towards efficient pricing, while laying the foundation for further regulatory change. These new rules for connection pricing methodologies come into effect from 1 April 2026.

    We encourage distributors to read relevant documents in the ‘Resources’ section below for information about applying the new rules.

    Alongside this work, our Network connections project is making the process for new and upgraded connections to the network more efficient.

    Questions?

    We held three Q&A sessions between September and November 2025 about the new rules for connection pricing methodologies coming into effect from 1 April 2026. These online sessions were an opportunity to ask questions about the rules and troubleshoot any implementation concerns. Read our FAQs: New rules for connection pricing methodologies or watch the recordings in the timeline below.

    We have also responded to questions about proposals to address high up-front connection charges and introduce obligations on distributors to offer and maintain connections. Read the questions and answers: FAQs: proposals to address up-front connection charges and distributor obligations.

    For any other questions, email us at  connection.feedback@ea.govt.nz with ‘Connection pricing’ in the subject line.

    If you would like to be notified when we have added new Q&As, and other related updates, email  connection.feedback@ea.govt.nz with ‘Connection pricing – subscribe’ in the subject line.

    Timeline

    Past activity

    Resources

    For distributors:

    These documents may be updated as we engage with distributors over the coming months.

    If you would like to be informed of new resources, updated documents, or other updates on this work, please email connection.feedback@ea.govt.nz with ‘subscribe’ in the subject line.

    Project background

    As part of New Zealand’s electrification, more energy users – such as industrial plants, big businesses, new data centres, EV charging stations and new housing developments – are seeking new or larger connections directly to the distribution network.

    Getting the rules around connection pricing methodologies right is one essential building block to support the growth of businesses and critical infrastructure, and efficient electrification of the economy.

    We consulted on distribution pricing in July 2023. In May 2024, we outlined our intentions to develop a proposed Code amendment for connection pricing in our ‘Distribution Pricing Reform: Next Steps’ paper. We were concerned that inefficiently high up-front charges are a barrier for new consumers looking to connect to the network, or existing consumers wanting to upgrade their connections.

    In June 2024, we announced a technical group of industry representatives to assist with testing the workability of our proposed Code amendments and their implementation.

    Following consultation in late 2024, we proceeded with four new ‘fast-track’ measures proposals in late 2024, which proposed changes as the first steps toward efficient pricing methodologies. Further reform is ongoing.

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