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; 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. This issues paper provides an indication of our initial views on the effectiveness and limitations of the current RIT guidelines.
Following the issues paper, the AER will be holding a stakeholder workshop in March 2018 to give stakeholders the opportunity to provide informed input and engagement into the review process, before we finalise the review around late September 2018.
Public forum: Improving guidance for better application of regulatory investment tests
We will hold the public forum, hosted by AER Board member Jim Cox, in Sydney on the morning of 14 March 2018. Stakeholders will complete a short survey upon registration. We request stakeholders register by 6 March 2018. For more details, including how to register, see Initiation.
Request for submissions
The Australian Energy Regulator (AER) invites stakeholders to review the matters raised in this issues paper and provide written submissions. We also welcome submissions on relevant issues not discussed in the paper.
We invite submissions by the close of business 6 April 2018. We prefer stakeholders send submissions electronically to: RIT@aer.gov.au.
Alternatively, stakeholders can mail submissions to:
Mr Peter Adams
General Manager, Wholesale Markets
Australian Energy Regulator
GPO Box 520
MELBOURNE VIC 3001
We prefer all submissions be publicly available to facilitate an informed and transparent consultation process. We will therefore treat submissions as public documents unless otherwise requested.
We request parties wishing to submit confidential information to:
- clearly identify the information that is subject of the confidentiality claim
- provide a non-confidential version of the submission, in addition to a confidential one.
We will place all non-confidential submissions on our website at www.aer.gov.au. For further information regarding our use and disclosure of information provided to us, see the ACCC/AER Information Policy.
Please direct enquiries about this paper to RIT@aer.gov.au or to Lisa Beckmann on (02) 6243 1379.