AER receives notification of RIT-T dispute from SACOSS

The Australian Energy Regulator (AER) received written notification on 15 March 2019 from the South Australian Council of Social Service (SACOSS) disputing conclusions made in ElectraNet’s Project Assessment Conclusions Report (PACR) for the South Australia Energy Transformation (SAET) regulatory investment test for transmission (RIT-T).

SACOSS has raised a dispute under Clause 5.16.5 of the National Electricity Rules (NER) on the grounds that the SAET RIT-T PACR  does not adequately consider the system security risks with the assumed retirement of three gas generators and an outage of one of the interconnectors, such as the Heywood interconnector being constrained in South Australia. In particular SACOSS contends that the modelled market benefits of the preferred option in the SAET RIT-T PACR may not be achievable based on assumed interconnector capacities if the interconnector cannot be operated as intended.

The RIT–T is a cost‒benefit analysis that transmission businesses apply before making network investments in excess of $6 million. The purpose of the RIT–T is to identify the network or non-network investment option with the highest net economic benefits across the National Electricity Market. This promotes efficient investment decisions and helps ensure that consumers pay no more than necessary for electricity network infrastructure.

Under the dispute resolution framework set out in the NER, the AER has 40 days to make a decision on the dispute. We can extend this timeframe to up to 100 days.

Our role in the dispute resolution process is to assess the transmission business’s compliance with the RIT‒T and NER rather than to undertake a full merits review. Where instances of non-compliance are identified, the AER may, as part of its determination, direct the RIT-T proponent to amend its final report to ensure the RIT-T is applied in accordance with the requirements of the Electricity Rules.

We are currently assessing the dispute grounds raised by the disputing party and will make a decision in accordance with the NER.

Issued date: 
19 March 2019
AER reference: 
AC 34/19
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