The New Zealand competition authority has published a draft decision concerning Wellington Electricity's request to recover costs linked to a major network upgrade necessary for supplying electricity to the Wellington City Council's new Sludge Minimisation Facility at Moa Point.

This project entails enhancing the electricity infrastructure at Moa Point and establishing a new cable connection from the Ira Street Zone Substation. The aim is to ensure reliable electricity supply to the new facility while maintaining the overall security of supply in the region.

According to the economic regulation framework, electricity lines companies are not permitted to automatically pass on unexpected major project costs to consumers. They must submit an application to the Commerce Commission, which evaluates the justification for the investment, the possibility of reprioritizing other projects within the existing revenue allowance, and whether consumers should share in the costs. This framework aims to balance the need for investment in essential infrastructure with the protection of consumers from excessive charges.

In reviewing Wellington Electricity's application, the Commission assessed whether the project was reasonable to exclude from prior business planning, the necessity of the investment, the prudence and efficiency of the proposed costs, and the appropriate allocation of costs between beneficiaries and consumers.

The draft decision indicates that the project satisfies the relevant regulatory criteria. The Commission proposes to approve Wellington Electricity's application and adjust its price path to permit the recovery of additional revenue associated with the project.

Wellington Electricity anticipates that this adjustment would result in an increase of approximately 10 to 20 cents per month on a typical household electricity bill, equating to about $2.40 annually.

Additionally, Wellington City Council is set to contribute $8.5 million towards the project through both upfront contributions and ongoing payments, which will help mitigate the costs incurred by other consumers.

The Commission is currently inviting submissions on the draft decision, with the deadline for submissions set for 5pm on 31 August 2026.