The AER has released its final Transmission Efficiency Test and revenue determination guideline for non-contestable network infrastructure projects (Guideline). This Guideline is a revision to the first version published in April 2023. We amended the Guideline to improve the efficiency of the non-contestable revenue determination process and to reflect recent changes to the Electricity Infrastructure Investment Regulation 2021 (NSW) and Chapter 6A of the National Electricity Rules (NER).
In amending the Guideline, we have removed the requirement for the AER to make a draft decision which covers all aspect of our revenue determination. We have instead replaced it with a preliminary position paper that focuses on the key issues for each revenue proposal. We consider this change will lead to an improved, streamlined non-contestable revenue determination process by fostering more productive targeted engagement between the AER, Network Operators and other interested stakeholders.
We have made other minor updates to the Guideline to clarify existing processes and to reflect the outcomes of other related processes that affect our assessment of non-contestable projects. This includes amending the Guideline to reflect the new financeability and concessional finance provisions in the NER and establishing our assessment approach to contestable augmentations.
We will apply our guideline when we determine the amounts to be paid to Network Operators for constructing and maintaining these non-contestable network infrastructure projects. This process will assess whether costs are efficient, prudent and reasonable, as these amounts will ultimately be recovered from NSW electricity consumers through their retail bills.
2025 review of the guideline
We are currently reviewing the revenue determination guideline for NSW non-contestable infrastructure projects, to reflect changes the NSW Government made in 2024 to the Electricity Infrastructure Investment Regulation 2021 (NSW) (EII Regulation) to make revenue determinations for network infrastructure projects that combine both contestable and non-contestable components. We refer to these as hybrid revenue determinations.
Further information about our review can be found here.