The Australian Energy Market Commission today started a consultation on a rule change request which proposes changes to the planning of replacement infrastructure by electricity transmission and distribution network businesses.

As energy markets continue to evolve, embedded generation, demand response and other technologies may provide alternatives to ‘poles and wires’ when parts of the network need to be replaced. This rule change request, submitted by the Australian Energy Regulator (AER), proposes to extend some of the mechanisms and planning arrangements in the rules to provide better information and more transparency on upcoming network replacement projects.

In particular, the proposed rule change would extend the application of regulatory investment tests (the RIT-T and RIT D) to include replacement projects. These tests, which currently only apply to new infrastructure, require network businesses to weigh up the costs and benefits of new assets while also considering non-network alternatives.

The rule change request also proposes that network businesses include more information about upcoming asset replacement needs in their annual planning reports. One of the benefits of these proposed changes is that it may assist providers of non-network services to identify opportunities to propose alternatives to poles and wires.

A consultation paper has been prepared to assist stakeholders in providing submissions on the rule change request. Submissions are due by 24 November 2016. The AEMC has also today extended the time for the making of a draft rule determination for this rule change request to 13 April 2017. This extension is necessary given the complexity of the issues raised in the rule change request.

Media: Prudence Anderson 0404 821 935 or DL (02) 8296 7817