Transmission Efficiency Test and revenue determination guideline: non-contestable network infrastructure projects

Sector: 
Status: 
Date initiated: 
29 November 2022
Contact: 
General enquiries - REZ REZ@aer.gov.au

Overview

The AER has released its final guideline that sets out how we will make revenue determinations for network operators authorised or directed to carry out non-contestable network projects under the NSW Electricity Infrastructure Roadmap.

We have been appointed to undertake this role under the NSW Electricity Infrastructure Investment Act 2020 (EII Act). Our draft guideline substantially reflects the approach to economic regulation for transmission businesses under the National Electricity Rules. In this way, we can determine that the amounts paid to Network Operators for constructing and maintaining these network infrastructure projects are efficient, prudent and reasonable, as these amounts will ultimately be recovered from NSW electricity consumers through their retail bills.

The AER has also developed a guideline for our approach to contestable network infrastructure projects under the EII Act. It focuses on us assessing whether the competitive assessment process is genuine and appropriate. If we are satisfied with the process, we may adopt the outcome of the process in our determination rather than undertaking a detailed review of components of a revenue proposal.