The Australian Energy Regulator (AER) has published its NSW contribution determination guideline (the Guideline) about 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.
The contribution determination process will allow the 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.
To give effect to our regulatory functions under the EII Act, the Guideline sets out our process and method for how we intend to make a contribution determination. Our method will be operationalised through the contribution determination template.
We will commence the first contribution determination process in October 2022, with our contribution determination to be gazetted by 28 February 2023.
It is recommended to read our guideline in conjunction with the NSW Office of Energy and Climate Change’s policy intent on exemptions document. This document outlines exemptions from Roadmap costs for emissions-intensive trade-exposed entities and green hydrogen producers. It also outlines a proposed process for administering exemptions.