Cost thresholds review for the regulatory investment test for transmission (RIT-T) 2012

Date completed: 
20 November 2012
Date initiated: 
31 July 2012
Effective date: 
1 January 2013


The AER has initiated a review of the cost thresholds associated with the Regulatory Investment Test for Transmission (RIT-T).

The RIT-T is a cost-benefit test that transmission companies must apply before building electricity transmission infrastructure. The test applies for only transmission investments above certain cost thresholds. The National Electricity Rules require the AER to undertake a cost thresholds review to ascertain whether in light of changes to input costs, the thresholds need to be changed to maintain their appropriateness. The review is being conducted in accordance with clause 5.6.5E of the Electricity Rules.

On 31 July the AER published an Issues paper outlining the matters under review. Interested parties were invited to provide written submissions by 21 August 2012.

On 11 September, the AER published a draft determination. The AER’s draft determination is that:

  • the $5 million cost thresholds in clause 5.6.5C, in relation to the definition of replacement transmission network asset and in relation to transmission investment as referred to in the definition of new network investment, be maintained at $5 million; and
  • the $35 million cost threshold in clause 5.6.6(y) be increased to $38 million. The revised cost threshold will take effect on 1 January 2013.

Interested parties were invited to provide written submissions by 16 October 2012.

On 20 November 2012, the AER published a final determination.  The AER's final determination upholds the AER's draft determination.