The Australian Energy Regulator (AER) has published draft amendments to the Cost Benefit Analysis guidelines and Regulatory Investment Test (RIT) application guidelines.These draft guidelines were released on 28 July 2023 and include:
- updates to existing Cost Benefit Analysis guidelines
- updates to existing RIT‒T application guidelines
- updates to existing RIT‒D application guidelines
This guideline review covers amendments resulting from the Australian Energy Market Commission’s (AEMC’s) material change in network infrastructure project costs rule determination, and the Transmission Planning and Investment (TPI) Review Stage 2 final report. These draft guideline amendments include proposed guidance on:
- the approach to identifying a material change in circumstances that may trigger the requirement for a RIT proponent to reconsider the conclusions in the RIT.
- acceptable cost estimate accuracy classification systems that should be used for the RIT and improved transparency regarding the derivation of cost estimates for credible options identified in the RIT-T.
- the definition of ‘early works’ activities conducted by a RIT-T proponent.
Invitation for submissions
We welcome submissions from interested stakeholders in response to these draft amendments by 8 September 2023. Submissions or requests for alternative methods of submissions, should be emailed to RITguidelines@aer.gov.au.
We invite stakeholders to register for a public virtual information session, to be held on 9 August 2023. The purpose of this session is to provide information on the draft guidelines and seek stakeholder feedback.
Stakeholder consultation is a key part of our process, and we encourage interested parties to attend the virtual information session so we can listen and respond to stakeholder feedback. This is also an opportunity for stakeholders to ask questions prior to written submissions closing.
- Date: Wednesday 9 August 2023
- Timing: 10.30–11.30 am AEST
- RSVP: Please email RITguidelines@aer.gov.au and advise the names of attendees, their organisation, and any accessibility requirements.
On 18 May 2023, the AER published a consultation paper on the review of the cost benefit analysis (CBA) guidelines and application guidelines for its regulatory investment tests (RIT-T & RIT-D) (together the Guidelines review). The RITs are cost–benefit analyses that network businesses must perform and consult on before making major investments in their networks. When undertaking RITs, network businesses must give due consideration to what options are out there, before identifying the best way to address needs on their networks.