More efficient distribution prices

Upcoming Open Closed Decision

View submissions Submissions closed 19 February 2019

Consultation

No-one wants to pay more than they should for power, but that’s what will happen if distribution pricing doesn’t change soon.

We are reviewing the principles for distribution pricing to clarify our expectation that the price anyone pays reflects the costs of the electricity distribution service they are getting

Distribution networks take electricity from the transmission grid to the connection point for a property.

Distribution accounts for about 27% of the cost of an average power bill.

New technologies like electric vehicles and solar panels could have all kinds of unintended impacts if the current distribution pricing structures remain in place. One example is: if someone gets solar panels they can reduce the share they pay of the distribution network costs, meaning other consumers on that network will pay a higher share.

At a 2016 electricity industry conference, there was near-unanimous agreement that distribution pricing needs to change. Some good progress has been made by distributors, but price reform is not happening quickly enough and needs to advance with more urgency.

The Authority has now published a consultation paper to seek views on its proposal for amending the Distribution Pricing Principles and introducing a monitoring regime.

Our paper:

proposes changes to the Distribution Pricing Principles to clarify our expectations for distribution prices
proposes a star rating of distributors’ price structures, to encourage and support reform
works through three examples of pricing structures that would get a higher rating.

The period for making submissions on these proposals closed on 19 February 2019.