Capacity cost and customer chargeable work
What are capacity costs?
Capacity costs are one-off charges that apply when you connect to the electricity network for the first time, or when you need more power than your existing connection provides. They help pay for your share of the network capacity needed to supply your property or project. This includes the equipment and shared network assets that make capacity available, such as cables, transformers, and other network infrastructure.
Capacity costs help make sure the cost of providing extra capacity is paid by the customers who need it, rather than being spread across all existing customers. They also help fund future network upgrades when demand grows beyond what current assets can support.
You may need to pay a capacity cost if you are building a new subdivision, building a new home or business where a supply is not already assigned. If you are upgrading your existing connection (e.g. increasing power capacity), you will need to pay a capacity cost reflecting the difference in the additional amount of power you require.
If your property already has assigned capacity available at the boundary (i.e. you are in a new subdivision), there will be no charge for new capacity. However, if you are requiring new capacity for your project, there will be a capacity cost. If there is not currently power (or enough power) to cover the capacity you require, the dedicated cost of a network upgrade or extension will need to be covered by you.
If your project requires dedicated network upgrades or extensions, you will need to cover the cost of this work.
Keeping costs fair and transparent
Capacity costs and the cost of any dedicated work needed to enable your project are applied so costs are shared fairly and transparently:
- New or upgraded connections often require new equipment or upgrade work. These costs are paid by the customer causing the change, not existing customers.
- Ongoing network costs are recovered through line charges, but new infrastructure is funded separately to avoid pushing up lines charges for existing customers.
- Existing customers don’t subsidise new developments, and new customers pay their fair share for the capacity they will take up on the network.
- Capacity costs signal the real cost of capacity on the network, helping encourage smarter, more efficient use of capacity.
How are the costs calculated?
Costs reflect the typical works needed to add capacity. Standard rates are used for shared network capacity, unless a project is unusual or large.
The contributions are made up of two main parts:
- The dedicated cost of work and equipment to extend the network or any upgrades required for your connections
- Capacity cost, which is calculated through the share of the network capacity at the level you connect to
If your project is not residential or property development related the project may trigger a pioneer scheme. This regulatory defined scheme means that you would pay to extend the network, but if others connect to this within 7 years, those new connections contribute toward your original cost, so you may receive a partial reimbursement. This makes sure early customers aren’t disadvantaged. (Note: Exclusion thresholds apply)
You’ll receive a clear quote before any work begins.
Ongoing charges
Even after paying a capacity cost, you’ll still pay regular line charges through your electricity bill. These ongoing charges cover the operation and maintenance of the entire network.
