We have released draft supporting guidelines and guidance notes that support the regulation of network infrastructure projects under the NSW Electricity Infrastructure Roadmap:
- Cost allocation guideline - Electricity Infrastructure Investment Act - Draft
- Legal and functional separation guideline - Electricity Infrastructure Investment Act - Draft
- Cost allocation methodology and ring-fencing for EII regulated transmission services - Guidance Note
We have been appointed as a regulator under the Electricity Infrastructure Investment Act 2020 (NSW) (EII Act). As part of this role, we are responsible for developing and publishing guidelines to support the exercise of our functions under the EII Act.
The Cost allocation guideline requires network operators to identify, allocate and report costs associated with different activities and services. This reduces the risk of cross-subsidisation between regulated monopoly services and activities undertaken in contestable market.
The Legal and functional separation guideline sets out legal, staff and information separation requirements for network operators. These requirements reduce the risk of network operators using their position in monopoly markets to obtain an unfair competitive advantage in contestable markets.
Update
Cost allocation & Legal and functional separation draft guidelines
In December 2024, the NSW Department of Climate Change, Energy, the Environment and Water (DCCEEW) made legislative amendments affecting the application of the Cost allocation guideline and the Legal and functional separation guideline to network operators regulated under the Electricity Infrastructure Investment (EII) framework.
As a result of these amendments, the AER will not be finalising its draft Cost allocation guideline or draft Legal and functional separation guideline. For information on how these legislative amendments affect existing and future network operators regulated under the EII framework, please refer to the AER's Cost allocation methodology and ring-fencing for EII regulated transmission services - Guidance Note.
This version of the guidance note is based on Chapter 9A (NSW) published on 13 December 2024.
Retiring the Incentive schemes for non-contestable network projects in NSW: draft Guidance note
The Incentive schemes for non-contestable network projects in NSW: draft Guidance note has been superseded by the AER's EII Assessment Approach for Non-contestable revenue determination: Guidance note published in September 2025.