The Australian Energy Regulatory (AER) is requesting submissions on its draft decision to increase some of the cost thresholds associated with the Regulatory Investment Test for Transmission (RIT–T) and Regulatory Investment test for Distribution (RIT–D). The RIT–T and RIT–D are cost–benefit tests that network businesses must apply to identify the most efficient option to address a need on its network. The test applies for only transmission and distribution investments above certain cost thresholds set out in the National Electricity Rules (the Rules).
Clause 5.15.3 of the Rules requires the AER review the RIT cost thresholds, along with other cost thresholds relating to the annual planning reports, every three years in light of changes to input costs. The AER last reviewed the cost thresholds for transmission and distribution investments separately in 2015 (see our final determination).
After considering written submissions, the AER will publish a final decision in November 2018, which will allow the new cost thresholds to take effect from 1 January 2019.
Separately, the Energy Security Board (ESB) is coordinating the work of the Australian Energy Market Commission, the AER and the Australian Energy Market Operator on the planning and regulation of the transmission system and interconnection. This review is not impacted by nor does it impact that coordination of work of the ESB.