Rule Change: Open

Overview

On 5 May 2022, the Australian Energy Market Commission (AEMC) published a consultation paper on a rule change request from Marinus Link Pty Ltd (MLPL).
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The rule change request seeks to enable the Australian Energy Regulator (AER) to establish a revenue determination for an intending Transmission Network Service Provider (TNSP). 

An intending TNSP is a party that intends to provide prescribed transmission services but does not currently do so, and who is registered by AEMO as an Intending Participant under Chapter 2 of the NER.

Key features of Marinus Link Pty Ltd's (MLPL) proposed rule are: 

  • the AER will be required to undertake revenue determinations, including stakeholder consultation, in circumstances where prescribed transmission services are not yet provided.
  • intending TNSPs may propose a regulatory control period, in their application for a revenue determination.
  • expenditure incurred prior to the first regulatory control period would be included in the RAB, provided that it is prudent and efficient.
  • existing NER Chapter 6A arrangements will apply to intending TNSPs

Provisions that aim to reduce the risk that the AER will be required to make unnecessary or premature revenue determinations are also included.

Issues such as cost allocation related to Project Marinus or other regulated transmission assets in Commonwealth waters are out of scope of MLPL’s rule change request. Reviewing the current cost allocation approach and suitability of those arrangements for inter-regional transmission is a current priority for the Energy National Cabinet Reform Committee.

Stakeholders are invited to make written submissions on the consultation paper by 02 June 2022.

Background

Marinus Link is an actionable ISP project which has completed the RIT-T and is progressing through approvals.  

MLPL’s view is that “a revenue determination is a pre-requisite for obtaining finance from the capital markets (and ultimately proceeding with the project), and a revenue determination for a new TNSP cannot be made under the existing Rules.”

While the economic regulatory framework provides a mechanism for TNSPs to submit a contingent project application to the AER, this framework does not apply to intending TNSPs.

MLPL has proposed this rule change to allow the AER to establish a revenue determination for an intending TNSP.

MLPL notes that “the issue being addressed in this Rule change proposal is a separate and independent matter to transmission cost allocation.”
 

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Documentation

PENDING

Proposal document