Rule Changes: Completed

Replacement expenditure planning arrangements

Reference:
ERC0209
Proponents:
AER
Decision:
Rule made
Amending rule:
NER 5
Commenced:
18-Jul-2017 , 18-Sep-2017
Amending chapters:
11, 5
Rule version:
94
Other rule versions:

Overview

On 18 July 2017 the AEMC published a final rule determination and final rule in relation to replacement expenditure planning arrangements for electricity network service providers.

On 18 July 2017 the AEMC published a final rule determination and final rule in relation to replacement expenditure planning arrangements for electricity network service providers.

The rule improves the transparency of retirement, de-rating and replacement decisions by electricity network service providers. In doing this, it assists non-network providers identify efficient alternative solutions to address network needs and network users to make decisions about where best to connect to the network. The transparency of information is also likely to assist the Australian Energy Regulator in making revenue determinations. Other stakeholders such as consumer groups may also find the information useful for the purpose of revenue determination processes.

The rule provides these benefits by having the effect of including network asset retirement and de-rating information in network service providers' annual planning reports. It also extends the current regulatory investment test frameworks to replacement expenditure. A number of ancillary changes to the National Electricity Rules have also been made in the rule.

The rule has been made in response to a rule change request submitted by the Australian Energy Regulator (AER). It includes an implementation approach for the new requirements.

Background

On 11 April 2017, the AEMC published a draft rule determination on the rule change request for consultation.

The AEMC commenced consultation on the rule change request on 27 October 2016. At this time, the AEMC also extended the time for the making of a draft rule determination to 13 April 2017. This extension was necessary given the complexity of the issues raised in the rule change request.

The rule change request was submitted to the AEMC on 30 June 2016.

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