AER - Regulatory Investment Test for Distribution application guidelines - 2022 - Version 4

On 1 August 2022, we released the final updates to the following six documents, to give effect to the new rules allowing distributors to provide SAPS to existing customers, and to offer to connect new customers to existing distributor-operated SAPS (also called regulated SAPS) where it is more economically efficient than connection to the interconnected national electricity system.

Our decision:

• explains what stand-alone power systems (SAPS) are and the advantages they have over a connected network
• describes the SAPS rule changes coming into effect 1 August 2022, including how the changes integrate the principles of value for money and consumer protections
• outlines the amendments we have made, including our response to issues raised in stakeholder submissions.

On 24 February 2022, the Australian Energy Market Commission published new rules allowing distributors to provide stand-alone power systems (SAPS) to existing customers, and to offer to connect new customers to existing distributor-operated SAPS (also called regulated SAPS) where it is more economically efficient than connection to the interconnected national electricity system.

Ahead of the implementation of the rule change on 1 August 2022, we were required to review, and where necessary amend and publish relevant guidelines. This is to ensure that our guidelines are consistent with the national arrangements for regulated SAPS before the rule change takes effect. 

On 1 August 2022, we released the final updates to the following six documents, to give effect to the new rules allowing distributors to provide SAPS to existing customers, and to offer to connect new customers to existing distributor-operated SAPS (also called regulated SAPS) where it is more economically efficient than connection to the interconnected national electricity system.

• AER - Connection charge guidelines for electricity retail customers - August 2022
• AER - Distribution reliability measures guideline - August 2022
• AER - Expenditure forecast assessment guideline - distribution - August 2022
• AER - Regulatory investment Test for Distribution - August 2022
• AER - RIT-D application guidelines - August 2022
• AER - Service classification guideline - August 2022

We have completed this review, including undertaking a consultation process, and have made changes to the six documents.