Today, following a targeted review, the Australian Energy Regulator (AER) has published a new version of its Transmission Efficiency Test and revenue determination guideline for non-contestable network infrastructure projects (Non-contestable Guideline) which is developed by us as part of our role as regulator under the Electricity Infrastructure Investment Act 2020 (NSW) (EII Act). The review focused on incorporating the Australian Energy Market Commission's Improving the cost recovery arrangements for transmission non-network options rule into the Non-contestable Guideline.
A new chapter has been added to the Non-contestable Guideline to address the determinations we make on cost recovery arrangements for non-network options (NNOs) that are implemented as part of network infrastructure projects under the EII Act. Chapter 8 sets out how a network operator should prepare and submit an application for a determination on proposed cost recovery arrangements for the NNO projects. It also sets how we will assess those applications and the factors we will consider in making our determination.
The new version of the Non-contestable Guideline takes into account feedback received as part of our consultation. The explanatory statement outlines the key issues raised in stakeholder submissions and provides a summary of the AER's response to each of those issues.
Our amendments are consistent, as far as is reasonably practicable, with Chapter 6A of the National Electricity Rules and our network alternative support payment guideline that we developed under the national regulatory framework.
Network operators progressing a network infrastructure project in NSW under the EII Act that includes one or more NNO projects are encouraged to review the updated Non-contestable Guideline and consider how it may assist them to obtain greater cost recovery certainty in relation to a potential NNO that supports a network infrastructure project.
We intend to commence a broad review of the Non-contestable Guideline later in 2026. The review will consist of an assessment of all sections of the Non-contestable Guideline to ensure it remains current and reflects our recent experience in undertaking non-contestable determinations and amendments that have been made to the EII Act and Regulations, as well as relevant aspects of the National Electricity Rules.