The AEMC has made a final rule to streamline the regulatory process for three priority projects 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 minor upgrades to the interconnectors joining QLD-NSW and VIC-NSW, and a new interconnector between South Australia and New South Wales (Project EnergyConnect). 

The final rule allows for the Australian Energy Regulator to concurrently consider regulatory processes that apply to the three projects after the completion of the cost-benefit assessment (known as the regulatory investment test or RIT-T). The final rule does not remove or change any of the regulatory steps for these projects other than to allow them to run concurrently, and the AER cannot complete a step until the previous step has been completed.

The final rule may reduce the time between the completion of the RIT-T for these projects, and when the AER makes its determination on whether the transmission businesses can recover the cost of the projects.

The final rule was made in response to two rule change requests from Dr Kerry Schott AO that sought to streamline the same regulatory process for the different projects. The Commission consolidated these two rule change requests on 14 March 2019 and considered them as a single rule change request. 

As the rule change request was considered non-controversial, the AEMC followed an expedited rule making  process. The new rule starts on 11 April 2019.

This final rule is part of the AEMC’s recommended reforms to the transmission framework set out in our final report for the Coordination of generation and transmission investment review published in December 2018. In progressing the remainder of these reforms to better coordinate investment in transmission infrastructure and new generation, the AEMC is examining ways that market participants can more appropriately bear the risk of transmission investment, rather than consumers.  

Media: Prudence Anderson, Communication Director, 0404 821 935 or (02) 8296 7817