Revenue determination guideline for NSW contestable network projects

  • Accepting submissions
Sector: 
Status: 
Date initiated: 
6 May 2022
Contact: 
General enquiries - REZ, General enquiries - REZ REZ@aer.gov.au

Overview

The Australian Energy Regulator's Revenue determination guideline for NSW contestable network projects sets out how we will carry out our role in undertaking a Transmission Efficiency Test and making revenue determinations for Network Operators selected through a competitive procurement process to undertake network infrastructure projects in NSW.

As regulations under the Electricity Infrastructure Investment Act 2020 (NSW) are still to be finalised, our draft guideline is based on policy positions developed by the NSW Office of Energy and Climate Change. The Office of Energy and Climate Change has published an overview of the policy framework within which the AER will undertake its regulatory role, including a statement of specific policy positions. This document should be read in conjunction with our draft guideline.

Under a contestable procurement process, competition between potential Network Operators is expected to produce an efficient, prudent and reasonable outcome. The AER’s role under this approach is different to our revenue determination process for network businesses under the National Electricity Law and National Electricity Rules. Our focus will be on assessing whether the competitive procurement process is likely to produce an appropriate outcome, rather than undertaking a detailed review of the components of a revenue proposal. The draft guideline discusses our approach to assessing the Infrastructure Planner’s procurement strategy and process, and how we will use the outcomes of that process in our revenue determination for a Network Operator.

This different approach to making revenue determinations under a contestable approach means that elements of our revenue determination process, including timeframes and consultation, will vary from the process under the National Electricity Rules.

The AER is also developing a guideline setting out our regulatory approach to non-contestable network infrastructure projects. This guideline will closely reflect the approach to economic regulation of transmission businesses under the National Electricity Rules. We will release that guideline for consultation later in 2022.


Have your say

We are seeking submissions from interested stakeholders on the draft guideline by 27 May 2022.

We held a joint public forum with the Office of Energy and Climate Change on Tuesday 17 May 2022.