Industry practice application note for asset replacement planning

  • Upcoming stakeholder forum
Sector: 
Status: 
Date initiated: 
7 September 2018
Effective date: 
25 January 2019
Contact: 
AER General inquiries AERInquiry@aer.gov.au
AER reference: 
63054

Overview

On 25 January 2019, the AER published a final version of its industry practice application note to support network businesses in adopting best practice asset replacement planning. The application note aims to give network businesses more confidence that they are meeting the network planning framework in the National Electricity Rules. Providing this confidence will be valuable as industry is improving its transparency around asset retirement, de-rating and replacement decisions under the replacement expenditure rule change.

The application note is a companion piece to our new application guidelines for the regulatory investment tests, which we finalised in December 2018. The new application guidelines aim to assist network businesses to apply a cost–benefit analysis when making large investment decisions.

While this application note complements the regulatory investment test application guidelines, the two documents differ in that the application note stems from collaboration with industry rather than a requirement under the National Electricity Rules. The application note also has a more technical focus for network planners and asset managers that are applying economic assessments to asset replacement decisions, and draws on their experience to date.

Stakeholder forum

To assist industry in getting the most out of the application note, we are holding a follow up forum to continue working with industry to support good practice asset replacement planning. AER Chair, Paula Conboy will host the forum, with AER senior technical advisers leading the discussion.

The forum will focus on how the application note deals with key areas of interest to stakeholders, including on how to define the base case in the replacement expenditure context. We will also discuss how the application note fits in with key regulatory areas, such as the regulatory investment tests and annual planning reports.

Date: Tuesday 26 February 2019
Location: PARKROYAL Melbourne Airport
Time: 10:00 am to 4:00 pm
RSVP: Email RIT@aer.gov.au by COB Friday 15 February 2019