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electricity pricing

Vector’s line charges include the cost charged to Vector by Transpower for delivering electricity across Transpower's national grid to Vector’s network and the price relating to the cost of delivering electricity across our distribution network. Generally, we bill our line charges to electricity retailers. Electricity retailers then bill you. The line charges electricity retailers charge you may not be the same as what we bill your electricity retailer.

Our annual price changes are limited to that required to achieve the net allowable revenue prescribed by the Commerce Commission in its Electricity Distribution Services Default Price-Quality Path Determination 2020 (DPP) plus changes in pass-through and recoverable costs (e.g. Transpower transmission charges, council rates, statutory levies and other regulatory allowances) and a revenue wash-up from any under or over-recovery from previous pricing years. In November 2022, it is estimated that our line charges accounted for approximately 36% of an average residential consumer's bill, which include Transpower's charges which account for about 9%.

See our price schedules effective from 1 April 2022.
See our price schedules effective from 1 April 2023.

Our previous pricing schedules are available within our pricing disclosures.

consumer-led pricing design

We are helping to create a new energy future, in which pricing plays an important role. Our current pricing ‘roadmap’ which sets out how we are evolving our prices is located here, and was updated in April 2023.

Transmission pricingFurther line charge informationOther information

Passing through Transpower's transmission costs

Transpower's new transmission pricing methodology (TPM) has driven a rethink of our price structures.
Prior to 1 April 2023, distributors were allocated transmission charges mainly based on their share of peak usage. The new TPM, effective from 1 April 2023, removes any peak signal in transmission prices. In addition, in October 2022, the Electricity Authority published its latest version of the Distribution Pricing: Practice Note that provides principles and guidance on the treatment of transmission charges by distributors when setting line charges, focusing on the new TPM. Changes are therefore necessary in our transmission pricing approach.

From 1 April 2023, we have introduced a bulk grid exit point (GXP) based pricing method for the recovery of transmission pass-through costs. Under this method, the transmission price has ceased to be a unit charge and is instead calculated by an apportionment approach, using each electricity retailers’ historic volume share at each GXP to determine their fixed monthly transmission charges. The transmission pass-through cost will now be bulk charged to retailers and direct billed customers and no longer tied to individual installation control points (ICPs, which are points of supply connection between the local network and consumers).
We believe this approach to transmission cost recovery is more consistent with both how we are charged by Transpower under the new TPM and with the Electricity Authority's pricing guidance for unavoidable, fixed-like and location-based charges.

This approach means that there are two components to the Vector line charges: the electricity distribution network charge and the transmission pass through charges. The network charge remains ICP based, but the previously including transmission component has been removed. Please note how we charge electricity retailers for transmission costs may be different to how your electricity retailer charges the transmission costs to you.

For further explanation, please refer to our pricing methodology.

Time of use pricing

A two-part time of use (TOU) price structure is the mandatory charge to electricity retailers for all residential ICPs where the electricity retailer obtains the interval data from the ICP’s smart meter. The TOU structure has a daily fixed price with different volumetric prices depending on the time period when the electricity is used at the ICP. From 1 April 2023, peak time pricing is 7am to11am and 5pm to 9pm weekdays in the winter period (01 April to 30 September inclusive). Off-peak pricing applies at all other times. For residential ICPs without smart meters or where their retailer doesn’t obtain smart meter interval data, an anytime volumetric price is charged to electricity retailers instead.

TOU pricing means that during peak times our volumetric prices will be higher than during off-peak times, which better reflect the costs of electricity distribution. For residential standard ICPs, the off-peak variable price is zero cents per kWh, therefore the only distribution line charge between October and March is the fixed daily charge.

TOU pricing if passed on by electricity retailers offers residential ICPs the ability to reduce their electricity bill by shifting some electricity use from peak to off-peak times. Please contact your retailer to see if they are offering a TOU plan that passes through to you the benefits of our TOU pricing. A smart meter capable of communicating interval consumption data is required.

TOU pricing offers residential ICPs the ability to reduce their electricity bill by shifting some electricity use from peak to off-peak times. Please contact your retailer to see if they are offering a TOU plan that passes through to you the benefits of our TOU pricing. A smart meter capable of communicating interval consumption data is required.

Controlled pricing
Vector maintains residential controlled price categories designed to reward residential ICPs for the benefit these households deliver to us in helping to reduce load during peak periods.

From 1 April 2023, only ICPs that have an electrical hot water cylinder connected to our Load Control System are eligible for the controlled price categories. Previously ICPs with an active gas connection to our gas distribution network, or with smart electric vehicle chargers which are capable of being connected to Vector’s distributed energy resources management system (DERMS) were also eligible.

From 1 April 2023, dual energy (electricity & gas) ICPs are no longer eligible for residential controlled prices as we believe there is a price benefit from the time of use tariff for residential electricity ICP with a gas connection which tend to have lower peak usage.

From 1 April 2023, we have introduced a new TOU distributed energy resource (DER) tariff for residential ICPs with load that can be connected to or respond to our DERMS. We believe this will give us the flexibility for future load management.

With the introduction of the new TPM by Transpower, the benefit of hot water control is significantly reduced. From 1 April 2023, we have reduced the differential between controlled hot water and uncontrolled prices for the Auckland network residential ICPs. For residential ICPs on the Northern Network there is no differential between controlled hot water and uncontrolled hot water prices as controlling hot water on this network is no longer available. Please note that the ICPs in the Auckland and Northern networks have different controlled prices due to two different hot water control systems are used in the area.
If you want to know whether you’re eligible for the controlled or distributed energy resource price plans and would benefit from making a switch, get in touch with your electricity retailer.

Low user fixed charge

In September 2021, the Government agreed to phase-out the Low User Fixed Charge Regulations from 1 April 2022. These regulations set a maximum low fixed charge of 30 cents per day (excluding GST) that we and your retailer could offer to residential ICPs where consumption is less than 8,000kWh per year. The low user price categories have a combination of low daily charges and higher variable charges when compared with our standard price categories.
Phasing-out the regulations will see the maximum low fixed charge increase gradually over five years until it is about the same as the standard fixed charge. Each year, the retail maximum low fixed charge will increase by 30 cents (excluding GST). The increase in the fixed line charge because of the phasing-out of the regulations will result in a decrease to the volumetric line charges. While the regulations set the maximum amount, electricity retailers may choose to set lower rates for their low fixed charges.
While the regulations are being phased out, it still pays to check with your electricity retailer that you’re on the right plan. If you are a low-use electricity consumer, using less than 8,000kWh per year, the low fixed charge price categories could still be cheaper for you so it may pay to check with your electricity retailer to see if you are eligible for these price categories.
Your electricity retailer should inform you at least annually of how much energy you use, and whether it may be beneficial for you to switch to a low fixed charge price category. If you want to know how much electricity you use, which price category you are on or whether you are eligible for a low fixed charge price category, get in touch with your electricity retailer - it could save you money.