Major NZ power users call for more efficient distribution

Author: Jamie Gray,
Publish Date: Mon, 14 Sep 2026, 2:33pm

Major power users want to see a political focus on the power distribution network. Photo / Getty Images

The Major Electricity Users’ Group wants the political parties to focus on making the electricity distribution system more efficient, with stronger scrutiny of network costs.

As it stands, power distribution makes up about 24.5% of consumers’ power bills, second only to generation (38.5%).

With the November 7 election approaching, the Major Electricity Users’ Group (MEUG) has made a case for stronger requirements for electricity networks to improve efficiency and innovation and deliver better value to help keep network charges under control.

In launching its 2026 policy “manifesto”, MEUG executive director Karen Boyes said New Zealand also needed urgent action to ensure there was enough firming capacity – generation that is not reliant on the weather – in the system.

She said New Zealand needed reliable electricity networks.

“But we need to ask much harder questions about whether all 28 electricity distribution businesses [EDB] are operating as efficiently as possible, whether investment is delivering value for money, and whether consumers are getting a fair deal.

“If we want more affordable electricity, improving network efficiency has to be part of the answer,” she said.

Commerce Commission-sanctioned increases in transmission and distribution charges started in 2025 and will keep rising until 2030 in order to fund more investment in the network.

The Ministry of Business, Innovation and Employment’s latest March-quarter energy report said average electricity costs faced by households increased 11.7% on the March 2025 quarter, driven primarily by increased network charges.

The MEUG is calling on political parties to empower the Commerce Commission to benchmark EDB performance when setting price-quality paths, including comparisons with other networks and international best practice.

It also wants minimum performance standards for all EDBs, regardless of their ownership structure, with underperforming networks subject to greater scrutiny.

“Businesses operating across New Zealand need greater consistency,” Boyes said.

“It shouldn’t be harder or more expensive to do business simply because you are connected to one network rather than another.”

The MEUG is also calling for a review of the Commerce Act’s regulatory framework governing Transpower and EDBs, examining how network investment is funded, particularly where networks are investing ahead of demand, as well as the returns available to regulated electricity monopolies.

“We need to get the balance right between investing for the future and making sure today’s consumers aren’t carrying an unfair share of the cost,” Boyes said.

Alongside network reform, the MEUG said action was needed to ensure New Zealand had sufficient firming capacity to maintain electricity security during dry years.

Boyes said the country could not rely on a single solution to solve New Zealand’s dry-year electricity challenge.

“That means looking at a range of options, including the role of lake storage, strengthening demand response and investigating a firming and flexibility market to incentivise investment and lower barriers to entry,” Boyes said.

Demand response deals – when users agree to cut back on consumption when conditions are tight – have become part of the equation.

There are dozens of EDBs in New Zealand and the debate has been about whether there should be fewer of them.

In July, Energy Minister Simeon Brown said he expected electricity distribution businesses to address what he saw as “challenges of scale and fragmentation” but said forced amalgamation was not on the table.

Last week, an industry group called the Energy Transition Framework said more Government involvement in the energy sector was needed to prevent “significant economic harm” from declining domestic gas reserves.