The headline number: ‘Connection Charge (CC)’
What it is:
This is the connection charge you were quoted.
What it is not
- newly calculated in this document
- changed by this document
The reconciliation starts with your quoted charge and then explains how it is represented in the regulatory framework.
The main reconciliation relationship
In the reconciliation, you may see a formula that looks like this:
This is not how your price was set. It is a way of explaining how the following things are shown together for transparency:
- the costs of connecting you,
- the revenue expected from your connection over time, and
- your contribution to shared network costs, including capacity.
Each of these terms is explained below.
Incremental Cost (IC) – What it costs to connect you
Incremental cost represents the direct costs incurred to provide your connection, based on the minimum scheme. It is the regulated way of describing what it costs to connect you and support your demand on the electricity network.
It can include:
Extension Cost (EC)
The cost of building the physical assets needed to connect you (for example, lines, cables or transformers), based on the lowest-cost technically acceptable solution.
Customer-Selected Enhancements (CSE)
Any additional features you chose beyond the minimum scheme (for example, higher capacity or redundancy). If you didn’t request enhancements, this will be zero.
Network Capacity Cost (NCC)
Your share of the cost of adding capacity to the wider network so it can support your connection. This reflects that electricity networks are shared systems.
Incremental Transmission Cost (ITC)
Any additional costs associated with the national transmission system (if applicable).
Localised Historical Cost Recovery (LHCR)
In limited cases, an adjustment reflecting past network investment in a specific location.
Operating Cost Loading (OCL)
An allowance for additional operating costs. This typically applies only to certain non-standard connections.
Incremental Revenue (IR) – Revenue expected over time
Incremental revenue represents the network revenue we expect to receive from your connection over time, including:
Incremental Distribution Revenue (IDR)
Revenue from distribution charges you are expected to pay as part of your power bill.
Incremental Transmission Revenue (ITR)
Revenue associated with national transmission charges (where relevant).
Because this revenue is received over many years, it is shown using Net Present Value (NPV) — meaning future revenue is converted into a ’today value’ so it can be compared fairly with upfront costs. Please refer to the NPV explanations below for more on NPV calculations.
This does not mean you are being charged revenue. It is an explanatory comparison only.
Network Cost Contribution (NC) – Your contribution to shared network costs
This term reflects how your connection contributes to the cost of the wider shared network.
It helps show:
- that some network assets are shared by many customers, and
- how costs are spread fairly over time.