Capital contributions are one way in which Vector recovers the cost of providing electricity and gas distribution services to customers. In most cases, our capital contribution methodology applies a profitability assessment. That is:
Capital Contributions = Revenues we expect to generate from a new connection (in present value terms) less the incremental costs arising from the new connection.
This ensures that existing customers are not financially disadvantaged as new customers connect to the network. This calculation is applied through:
- Standardised charges, for some residential electricity and gas connections1
- Individual design and quote for non-standard residential, commercial connections, and developer sub divisions.
1 The profitability of a standard connection is assessed on the average of a group of connections of similar type.