On 18 September 2017, the Australian Energy Regulator (AER) amended its regulatory investment test for transmission (RIT-T) and regulatory investment test for distribution (RIT-D) application guidelines. These amendments are in response to the Australian Energy Market Commission’s (AEMC) final rule determination on our rule change proposal regarding the replacement expenditure planning arrangements rule change (“repex rule change”). The transitional arrangements require the AER to amend and publish RIT documentation to take into account the amending rule by no later than 18 September 2017.
In accordance with the rule requirements, our amendments are limited to those necessary to address the amending rule. We have examined the RIT-T, the RIT-D and the associated guidelines with a view to addressing the amending rule. Our examination revealed that neither the RIT-T nor the RIT-D requires amendment and that only minor amendments to the RIT-T and RIT-D application guidelines are necessary.
On 11 August 2017, we published for consultation draft marked up extracts of the application guidelines and invited submissions. All submissions received indicated agreement with our proposed amendments.
Therefore, our proposed amendments remain unchanged in our final application guidelines. In response to submissions and stakeholder feedback, we also updated the following references throughout the documents:
- cost threshold references to reflect our 2015 RIT cost thresholds review
- National Electricity Rules clause references throughout the RIT-T application guideline to address the renumbering of clauses
- removal of italicised terms from the RIT-T application guideline (for consistency with the RIT-D application guideline).
Consistent with the recommendations of the Council of Australian Governments (COAG) Energy Council’s RIT-T review, published on 6 February 2017, we intend to commence an additional, larger scale review of the RIT-T and RIT-D application guidelines before the end of 2017. Our large scale review will capture issues identified within the COAG Energy Council’s RIT-T review, any issues arising from the repex rule change determination that are yet to be addressed and other provisions in the guidelines that require amendment.