Draft decision to allow $1.3b investment in Canterbury electricity network

"Our role is to be the voice of the consumer and analyse Orion's proposed increased spend to ensure consumers get value for money. We consider if the investment is necessary, efficient, able to be delivered, and in the long-term interest of Canterbury consumers," Commissioner Nathan Strong says. 

"While affordability of electricity is important, it’s also crucial we support lines companies to invest to ensure our electricity networks are safe, reliable, and future-proofed so power gets to where it needs to be and communities can thrive," Mr Strong says. 

In Canterbury this investment is particularly important to support the significant population growth in areas such as Selwyn, and to protect against emergencies, including earthquakes and severe weather events. 

The Commission's draft decision is to approve $1.3 billion of the $1.5 billion proposed by Orion. The $1.3 billion allowed in our draft decision would increase the monthly electricity bill for an average customer of Orion by around $21 by 2032, a reduction from the around $33 increase under Orion’s proposal. 

"Any extra cost on households and businesses can be difficult to manage, especially when we know many Kiwis are doing it tough. We've rigorously tested Orion's proposed spend to make sure every dollar is justified and will benefit Cantabrians over the long term," Mr Strong says. 

“Orion’s network is currently performing well and delivering reliable services to the Canterbury region, but many of Orion’s assets are now reaching the end of their expected physical lives. We’re satisfied the majority of what Orion has proposed to spend on replacing aged assets is needed to continue to deliver safe, reliable services. 

"We’re also proposing regular public reporting so people can see what Orion has delivered and whether its investment is delivering the benefits it planned," Mr Strong says. 

The Commission's draft decision considered a range of evidence and information, including an independent expert’s review of Orion’s proposal, a targeted review of how Orion plans to make use of alternatives to grid upgrades like rooftop solar, batteries, electric vehicles and flexible electricity use, and submissions from consumers and businesses. 

The Commission is consulting on its draft decision until 8 December 2026, with cross submissions able to be made until 23 December 2026. A final decision is expected in March 2027. Consumer price increases would take effect from 1 April 2027.

Background

The full decision document is available on the Commerce Commission website. 

The Commerce Commission regulates New Zealand’s electricity lines businesses under Part 4 of the Commerce Act. As electricity lines businesses are monopolies and consumers have no choice but to connect to their networks, the Commission regulates the total amount of revenue they can earn from their consumers and the quality of service they must deliver. It does this by setting revenue limits and quality standards for local lines companies across New Zealand once every 5 years. 

However, if a lines company like Orion needs to invest substantially more in its network, it can submit an investment plan (a CPP) to the Commission seeking approval for increased revenues to recover this investment. 

The Commission has the power to approve, amend or decline aspects of the CPP proposal after assessing the supporting evidence for the proposed investment and considering consumer feedback. 

The Commission does not regulate Orion’s shareholders, set electricity prices, or get involved in the day-to-day management of the company. 

Orion submitted its CPP application to the Commerce Commission on 9 June 2026. Its application covers the five-year period from 1 April 2027 to 31 March 2032.