AER RIT-T cost thresholds review final determination - November 2012

The AER has published a final determination following its review of the cost thresholds associated with the Regulatory Investment Test for Transmission (RIT-T). The AER’s final determination is that:

• the $5 million cost thresholds in clause 5.6.5C, in relation to the definition of replacement transmission network asset and in relation to transmission investment as referred to in the definition of new network investment, be maintained at $5 million; and
• the $35 million cost threshold in clause 5.6.6(y) be increased to $38 million. The revised cost threshold will take effect on 1 January 2013.

The RIT-T is a cost-benefit test that transmission companies must apply before building electricity transmission infrastructure. Transmission companies must apply the test in instances where the costs of proposed transmission investments are above certain cost thresholds.

The National Electricity Rules require the AER to undertake a cost thresholds review to amend the cost thresholds in line with changes in input costs. The review has been conducted in accordance with clause 5.6.5E of the Electricity Rules.