The Australian Energy Regulator's Revenue determination guideline for New South Wales (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. We are undertaking this role as part of our functions as a Regulator under the NSW Electricity Infrastructure Investment Act 2020 (EII Act).
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.
This different approach to making revenue determinations under a contestable framework 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.