Review of the application guidelines for the regulatory investment tests for transmission and distribution

  • Accepting submissions
  • Upcoming stakeholder forum
Sector: 
Category: 
Regulatory investment test and guidelines
Status: 
Date initiated: 
15 December 2017
Effective date: 
30 November 2018
Contact: 
General enquiries - RIT RIT@aer.gov.au
AER reference: 
63054

Overview

The AER is currently undertaking a large scale review of the application guidelines for the regulatory investment tests (RITs). The RITs are cost-benefit analyses that network businesses must perform and consult on before making major investments in their networks. When undertaking RITs, network businesses must give due consideration to what options are out there, before identifying the best way to address needs on their networks.

We currently have separate RITs for transmission and distribution networks – the ‘RIT-T’ and ‘RIT-D’. Each RIT has its own application guidelines in order to guide businesses on how to apply the RITs consistently and transparently.

While we last updated the application guidelines for the RITs in September 2017, this update was limited to changes necessary to give effect to the the repex rule change that was initiated to expand the scope of the RITs to include replacement expenditure. In December 2017, we commenced a larger scale review of the RIT application guidelines.

Our review of the RIT application guidelines will explore improvements that:

  • the Council of Australia Governments Energy Council (COAG EC) identified in its RIT–T review;
  • have arisen out of the repex rule change
  • have been identified from ongoing applications of the RITs;
  • can guide stakeholders on how to account for recent policy and regulatory changes (such as the inaugural Integrated System Plan) and
  • stakeholders identify throughout this review.

On 20 February 2018, we published an issues paper to provide information on the RIT-T and RIT-D application guidelines in the context of this review. The issues paper provides an indication of our initial views on the effectiveness and limitations of the current RIT guidelines. On 14 March 2018, we held a public forum on Sydney. The public forum gave stakeholders an opportunity to provide input on some of the key issues we are considering as part of this review. See Initiation for a slide pack and summary note from the public forum, as well as submissions on our issues paper.

Invitation for submissions

On 27 July 2018, we published draft amendments to the RIT guidelines, along with an explanatory statement. We are seeking stakeholder views on these proposed changes until 7 September 2018. For information on how to lodge a submission, see Draft Decision.

Upcoming stakeholder forum

We are holding a stakeholder forum on our proposed amendments to the RIT application guidelines from 9:30am to 12:30pm on 29 August 2018. For clarity, we moved this forum from 15 August to avoid coinciding with a public holiday in Brisbane.

At the forum, we will discuss our draft RIT application guidelines. Attendees will be able to seek clarification on how we have incorporated stakeholder views into the draft RIT application guidelines. Attendees will also be encouraged to question and test our proposed guidance, so we can make our RIT application guidelines clearer and more useful.

To attend the forum, please email RIT@aer.gov.au by COB 22 August 2018. When registering, please nominate the location you wish to attend, noting that the forum will be held as a videoconference across ACCC/AER offices. For more information on the forum, see Draft Decision.