Far better would be for the lines companies to adopt a similar pricing model to what Chorus uses in their UFB pricing. In otherwords, select what size connection you need (capacity). Which will be a fixed fee to cover the cost of building and maintaining the network. And then pay a much lower per kW/Hr charge to cover the cost of energy only.
Agree that would be better, but lines companies are generally pretty risk averse and want to maintain a low profile, and there are a couple of issues:
- The capacity charge may breach the Low Fixed Charge regulations, as it could be viewed as a fixed charge that exceeds 15c per day
- Moving to capacity-based charges would lead to significantly higher bills for customers who don't use much electricity (e.g. elderly, poorer), which would not be popular.
It's also a beneficiary pays system and demand/capacity based systems are regarded the most fair methods. This is what got The Lines Company in King Country in trouble because they have such a sparse user base and lots of baches which may not consume much power but add demand to their network for capacity in trouble. However explaining this to consumers is incredibly difficult as a number just don't get the complexities of it.
The Low Fixed Charge regulations need to go anyway they were a feelgood band aid for a symptom of a problem and the beneficiaries are largely not going to be those that need it (like the Winter Energy Payment).
Per the Household sales-based electricity cost data from MBIE you'll see the main driver for the increase in electricity costs over the last five years has been distribution and transmission costs as significant capital investment has been needed from both the Transmission and Distribution network levels.