The Government has begun consulting on a potential crackdown on the nation’s lines companies amid a rise in power bills, 1News can reveal.
Options for reform were announced in a discussion document released this morning by the Ministry of Business, Innovation and Employment (MBIE).
The document showed lines companies are forecast to spend more than $32 billion over the next decade, with everyday consumers picking up the bill.
Much of that cash would be spent on physical infrastructure, like power lines and wires, as demand for electricity increases.
Lines companies are funded through a distribution or “lines” charge, which shows up for all consumers in the power bill each cycle.
An MBIE document showed lines companies were forecast to spend more than $32 billion over the next decade. (Source: Breakfast)
In the discussion document, MBIE officials said this charge currently made up about 24.5% of the average power bill.
They added that lines charges were also driving a recent increase in cost. The average power bill jumped by 8% over the last year – two-thirds of that coming from lines charges.
Investment in electricity was needed to respond to new demand, with electric vehicles one of many new pressures on the system, the document said. Companies also needed to replace “ageing infrastructure”.
But the spending required was so significant it would put “increasing pressure” on costs for people all over the country – creating debate on what’s fair.
The cost would be “ultimately borne” by consumers, adding to the already significant expense of power, the document said.
"We know there is a tension between the investment we need for the future and the rising energy bills consumers will experience to get there," it added.
Options for reform announced
The ministry is now asking the public for feedback on potential reform to the laws that govern lines companies.
There are 28 lines companies – also known as electricity distribution businesses, or EDBs – in total across the country, each serving a different area.
All of them operate as natural monopolies. As the only providers of their services, there is no competition for customers to turn to if dissatisfied.
As a result, they face close regulation under New Zealand legislation, with the Commerce Commission acting as a check for consumers and regularly monitoring their spending and investment plans.
The ministry has now put forward several options on ways that regulation could be changed to improve their performance.
One option was to give the Commerce Commission the power to restrict dividends from lines companies, to achieve certain "statutory financial principles".
Many are owned by public trusts or councils and typically pay a dividend back to their owners.
For example, in Christchurch, lines company Orion is effectively owned by the Christchurch City and Selwyn councils. It pays Christchurch City a dividend of about $27 million a year, reducing the rates bill for the locals by 7%. But now the ministry is consulting on whether it should introduce "financial ring-fencing" to ensure funds go back to the electricity network.
One option for reform was to enable the Commerce Commission to "require that revenue collected from electricity lines services is spent only on those services", it said.
MBIE also noted that some lines companies have non-essential – or ancillary – investments, including one company investing in Yealands Wine Group and another running a fibre broadband network.
While there was “limited evidence” that this was a systemic issue, officials were considering reform in that area too.
Options included establishing “more focused objectives” for lines companies and additional oversight of any ancillary investments.
Performance monitoring considered
MBIE also believes the 28 lines companies across the country could collaborate more, to reduce cost.
Their ownership has been a matter of debate for some years.
In 2025, a consultant group was brought in to assess the performance of electricity markets across the country, producing what is now known as the Frontier report. Its authors argued that the relatively small size of some lines companies limited their ability.
They recommended amalgamating them, with one option suggesting a merger to create just five “super” companies across Otago, Canterbury, Wellington, Waikato and Auckland. This would create the “opportunity to generate efficiencies”.
The Government rejected this recommendation.
The Energy Minister told BNZ Business Breakfast that the Government would consider how lines companies are regulated. (Source: Breakfast)
In its discussion document published today, MBIE noted this could have created disruption and costs “at a time when we are looking to EDBs to make significant investment to support future goals”. Instead, it is now suggesting that the companies could find ways to work together.
“We are focusing this work programme on delivering greater ‘collaboration and standardisation’ to achieve similar benefits of scale, without forcing structural changes,” it said.
Another potential option was to allow the Commerce Commission to run “comparative benchmarking” to assess how each company was performing.
This would require the commission to “publish accessible conclusions” on their performance.
Several other options were mooted, including ways for the commission to expand its information gathering powers and more flexible regulatory approaches.
MBIE is now requesting feedback from the public. Written submissions can be made on its website before September 22.
Minister for Energy Simeon Brown said electricity network costs are driving most of the increases in power bills and the sector needed to help make power more affordable.
“The cost of electricity and potential for rising bills is front of mind for New Zealand households and businesses. I expect the sector to play its part in improving affordability for Kiwis by boosting efficiency, including through greater collaboration and standardisation," he said.
“Positive work is underway, but more change is needed to make the system more affordable for households and businesses.”
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