The AEMC today published a consultation paper on a proposed rule change from Dr Kerry Schott AO, Chair of the Energy Security Board, to streamline the regulatory process for the new interconnector between South Australia and New South Wales identified in the Australian Energy Market Operator’s Integrated System Plan.

The inaugural Integrated System Plan, published in July 2018, forecasts where and when network investment needs to happen to support the large amount of new generation connecting to the grid in the coming years.  The plan has a list of priority transmission projects which includes the new interconnector.

The plan states the new interconnector, subject to the necessary approvals being received, would be built by the mid-2020s enabling connection of large amounts of renewable energy and improving resilience for South Australia. The proponent of the new link, ElectraNet, published a cost-benefit assessment (known as a regulatory investment test for transmission or RIT-T) for the project on 13 February 2019. 

To implement this project more quickly, Dr Schott proposes an amendment to the National Electricity Rules to reduce the time between the completion of the cost-benefit analysis (the RIT-T)  undertaken by ElectraNet and when the Australian Energy Regulator (AER) makes its determination on whether ElectraNet can recover the cost of the project.

The rule request does not remove any steps in the regulatory process. It saves time by allowing the AER to start its assessment of how much revenue can be recovered at the same time as it considers whether the proposed project is the best option for consumers. The AER would not be able to finalise the revenue recovery decision until it had made a determination on the proposed project. According to the request, running these steps concurrently could save up to six months, provided ElectraNet gives the AER any extra information it requests in a timely manner.

The RIT-T dispute process, which must be completed before the AER can start its assessment, would remain unchanged. Under the dispute process, stakeholders have 30 days to lodge a dispute notice about a RIT-T if they have concerns about how a transmission business has applied the test or its cost-benefit calculations. 

As the AEMC considers this to be a non-controversial rule change proposal, we are proceeding under an expedited process, with a final rule due in April 2019.

Subject to any objections to the expedited process, there will only be one round of consultation. Objections to the use of the expedited process must be lodged by 7 March 2019.

Submissions on the consultation paper are due by 21 March 2019.

The changes proposed by Dr Schott are closely related to those being considered by the AEMC as part of the Early implementation of ISP priority projects rule change. The Commission may look to consolidate these rule changes after it has considered stakeholder interest in the latest rule change request relating to the proposed SA-NSW interconnector. 

Media: Bronwyn Rosser, Communications Specialist, 02 8296 7847; 0423 280 341;