AER commences process to determine recovery of NSW Roadmap costs

The Australian Energy Regulator (AER) has commenced the first contribution determination process for cost recovery under the NSW Electricity Infrastructure Roadmap.

Under the NSW Electricity Infrastructure Investment Act 2020 (EII Act) we are required to make annual contribution determinations to confirm the costs of implementing the Roadmap. The Roadmap’s independent Scheme Financial Vehicle will recover these costs from the NSW Distribution Network Service Providers who are then required to pass the costs through to NSW electricity consumers on their retail bills.

We must gazette our contribution determination by 28 February 2023.

Once we make the contribution determination several steps must be undertaken by the NSW Distribution Network Service providers to:

  • Finalise exemption amounts to be applied to emissions intensive trade entities and green hydrogen producers in line with the OECC’s exemptions framework.
  • Apportion their respective contribution amounts according to their respective tariff structure statements.

This information is needed to determine bill impacts on NSW electricity consumers. Once these steps are completed bill impacts can be calculated. We expect more information to be available as part of the NSW Distribution Network Service Providers’ annual pricing proposals, received by April 2023. Upon receipt, we publish these pricing proposals on our website.

If stakeholders require further information on Roadmap costs, all enquiries should be directed to the OECC.

Background

We were appointed as a Regulator under the NSW Electricity Infrastructure Investment Act 2020 (EII Act) in November 2021.

The AER exists to ensure energy consumers are better off, now and in the future. We are the economic regulator for electricity and gas networks in every state and territory in Australia except Western Australia. We regulate electricity networks under the National Electricity Law and National Electricity Rules. We also regulate natural gas pipelines under the National Gas Law and the National Gas Rules.

The contribution determination process will allow the Roadmap’s Scheme Financial Vehicle to have sufficient funds to meet its liabilities, for example to cover the costs of underwriting new renewable generation or storage investment, network investment and the administration costs of Roadmap entities.

Our guideline implements the EII Act and Regulations developed by the OECC. The OECC published its policy intent on exemptions from Roadmap costs for emissions-intensive trade-exposed entities and green hydrogen producers and its proposed process for administering exemptions. This document should be read in conjunction with our guideline.

In the National Electricity Rules context, the Roadmap’s contribution determination is a jurisdictional scheme, and meets the eligibility criteria in the NER as assessed by the AER.

Sector: 
Issued date: 
5 October 2022
AER reference: 
AC 152/22
Contact: 
General enquiries - REZ REZ@aer.gov.au