The Australian Energy Market Commission (AEMC) has published a final determination and rule that will clarify processes associated with the cost recovery of critical transmission infrastructure projects, providing greater certainty to investors.

The final rule from the AEMC will allow the Australian Energy Regulator (AER) to establish a ‘revenue determination’ for parties intending to build a new transmission project or existing service providers intending to provide regulated transmission services, recognised as ‘Intending Transmission Service Providers’ (ITNSPs).

While the AER can make revenue determinations for existing Transmission Network Service Providers (TNSPs), the AEMC recognises there are gaps in the current framework for making revenue determinations for ITNSPs, which have been clarified in the final rule. 
Large scale transmission infrastructure projects can be complex and delivery timelines between projects can vary, and the new final rule clearly gives the AER more flexibility in its approach to making revenue determinations for ITNSPs.

The AER may now consider using a more streamlined process for ITNSPs, enabling more timely decisions that provide certainty and signalling to investors when costs associated with transmission infrastructure are to be recovered.

This means reduced risk of delays to investment decisions on the most suitable transmission projects to ensure customers get value for money, sooner.
A number of additional, minor changes have been made through the rule to enable critical transmission infrastructure projects to get off the ground.

An unprecedented level of transmission investment is required for the National Electricity Market’s transition to net-zero and market bodies are working to ensure more timely and efficient investment in electricity transmission infrastructure.

In recent months the AEMC has delivered milestones on a number of reviews and reforms including the Final recommendations of the Transmission Investment Planning Review (TPIR) Stage 2 and the TPIR Stage 3 draft report. 

The AEMC’s rule change follows a request submitted by Marinus Link Pty Ltd in March 2022. 

The final rule will be implemented from 20 January 2023.

Media: Jessica Rich, 0459 918 964, 

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