AER to review its cost thresholds for the regulatory investment tests

We have initiated a review 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).

The Rules require we review the RIT cost thresholds every three years, in light of changes to input costs.

The thresholds subject to review are set out in clause 5.15.3(b) and (d) of the Rules. We last reviewed the cost thresholds for transmission and distribution investments separately in 2015 (see our final determination).  

The review is being conducted in accordance with clause 5.15.3 of the Rules. Under those requirements, we will soon publish a draft determination. The draft determination will explain whether, how and why we are proposing amend the cost thresholds.

We will invite stakeholders to provide written submissions on the draft determination. A final determination will be published once we have considered all written submissions received.

Separately, the Energy Security Board (ESB) is coordinating the work of the Australian Energy Market Commission, the Australian Energy Regulator and the Australian Energy Market Operator on 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.

Sector: 
Issued date: 
2 August 2018
AER reference: 
AC 97/18
Contact: 
General enquiries - RIT RIT@aer.gov.au