Guidelines to make the integrated system plan actionable

Sector: 
Segment: 
Category: 
Regulatory investment test and guidelines
Status: 
Date initiated: 
20 November 2019
Effective date: 
30 June 2020
Contact: 
General enquiries - Guidelines to make the ISP actionable ISPguidelines@aer.gov.au
AER reference: 
63054

Overview

The Australian Energy Regulator (AER) is developing guidelines to make the integrated system plan (ISP) actionable. These include:

  • a new cost benefit analysis guideline
  • a new forecasting best practice guideline
  • updates to existing regulatory investment test (RIT) instruments
  • updates to existing RIT application guidelines.

These guidelines are part of a broader Energy Security Board (ESB) reform. The ESB is developing new rules to make the ISP an actionable strategic plan by strengthening the links between it and the transmission planning process.

Under the new rules, the ISP will provide a whole of system plan for the efficient development of the power system that meets power system needs for a planning horizon of at least 20 years. The ISP will influence transmission planning by triggering regulatory investment tests for transmission (RIT–Ts) and replacing some elements of the RIT–T process. The RIT is a cost benefit analysis that network businesses must perform and consult on before making major investments in their networks

Under the draft rules, the ISP will be subject to additional governance arrangements through binding cost benefit analysis guidelines and forecasting best practice guidelines. There will also be changes to the regulatory investment tests (RITs) and associated application guidelines to be consistent with the new planning process.

We are developing these guidelines in line with the consultation process set out in the National Electricity Rules. We commenced the consultation process on 20 November 2019 with the publication of an issues paper, and held a joint public forum with the ESB on 5 December. Submissions to the issues paper closed on 17 January 2020.