Rule Change: Completed
On 22 December 2022, the Australian Energy Market Commission (AEMC) published a final determination and a more preferable final rule that clarifies both the ability of the Australian Energy Regulator (AER) to establish a revenue determination for an Intending Transmission Network Service Provider (ITNSP) and the process for doing so, in response to a rule change request submitted by Marinus Link Pty Ltd (MLPL).
Under the final rule, an ITNSP is defined as an Intending Participant or Market Network Service Provider (MNSP) who intends to provide prescribed transmission services. This includes:
- a person registered as an Intending Participant intending to construct a new regulated transmission project; and
- any existing MNSP that intends to reclassify its network services as prescribed transmission services to become a TNSP.
The final rule supports timely and efficient investment in electricity transmission infrastructure
Our final rule improves investment certainty which reduces the risk of delays to investment decisions on major transmission projects. The final rule benefits consumers by supporting timely and efficient investment in electricity transmission infrastructure to enable the transition of the NEM.
Our more preferable final rule
We consider that under the current Rules, the AER has the ability to make transmission determinations for ITNSPs. However, there are gaps and regulatory matters in making transmission determinations for ITNSPs that need to be clarified. Our more preferable final rule clarifies these gaps and regulatory matters.
Our final rule aligns with the general intent of MLPL’s proposed rule as it clarifies that a revenue determination can be established for an ITNSP. Our final rule is a more preferable rule for the reasons outlined below.
- It broadly applies all of Chapter 6A to ITNSPs, but in a more flexible way than proposed by MLPL. It provides the AER with broad discretion around the process and timing to establish a transmission determination for an ITNSP.
- It makes other amendments to Chapter 6A to address gaps and clarify regulatory matters in the current framework to clarify how a transmission determination can be established for an ITNSP.
The final rule be implemented on 20 January 2023, one month after the publication of our final determination for this rule change.
Marinus Link Pty Ltd’s rule change request
On 3 March 2022, MLPL submitted a rule change request that sought to address the following issues that it claimed were a barrier to enabling MLPL’s final investment decision for Project Marinus.
- While a TNSP that has completed a RIT-T process for an actionable Integrated System Plan (ISP) project can submit a contingent project application (CPA), the CPA does not apply for ITNSPs who do not have a revenue determination.
- To obtain a revenue determination under the National Electricity Rules (NER), a participant must be registered as a TNSP (not be an Intending TNSP) and already provide prescribed transmission services. MLPL considered that the AER does not have the power to make a revenue determination for an ITNSP that is not yet providing prescribed transmission services.
To address these issues, MLPL proposed to amend Chapter 6A of the NER to allow the AER to establish a revenue determination for an ITNSP. Stakeholders generally supported MLPL’s rule change request but raised some issues with it.
Issues such as cost allocation related to Project Marinus or other regulated transmission assets in Commonwealth waters were out of scope of MLPL’s rule change request.