The contribution determination is about cost recovery under the NSW Electricity Infrastructure Roadmap (the Roadmap).
Under the NSW Electricity Infrastructure Investment Act 2020 (EII Act), we are required to make an annual contribution determination to ensure the Roadmap's independent Scheme Financial Vehicle has sufficient funds to meet its liabilities. These liabilities include, for example, the costs of network investment, the costs of underwriting new renewable generation, storage or firming investment, and the administration costs of Roadmap entities.
The NSW Distribution Network Service Providers are then required to pass the Roadmap costs through to NSW electricity consumers. The Roadmap’s contribution determination is a jurisdictional scheme under the National Electricity Rules.
To give effect to our regulatory functions under the EII Act, the contribution determination guideline sets out our process and method for making a contribution determination. Our method is operationalised through the contribution determination template.
We published a first iteration of the guideline and template in 2022. We then published revised versions in August 2023, after having published a draft and invited submissions in July 2023. Our revisions were minor and did not materially change our calculation methodology.
The guideline implements the EII Act and Regulations developed by the NSW Office of Energy and Climate Change (OECC). An additional feature of cost recovery under the EII Act is that it provides for exemptions for emissions-intensive-trade-exposed entities and green hydrogen producers. The OECC has published a policy document on these exemptions and its proposed process for administering exemptions, which should be read in conjunction with this guideline.