The AER is required to make revenue determinations for network operators who are authorised or directed to undertake network infrastructure projects. We undertake this role as a Regulator under the NSW Electricity Infrastructure Investment Act 2020 (EII Act).
Between 2022 and 2024, NSW Energy Corporation (EnergyCo) undertook a competitive assessment process to select a network operator for the main Central‑West Orana Renewable Energy Zone network project (CWO REZ network project). ACEREZ Partnership (ACEREZ) was the successful tenderer.
On 4 June 2024, AEMO Services Limited (the NSW Consumer Trustee) under s. 31(1)(b) of the EII Act authorised ACEREZ as the network operator to develop, construct, own, control and operate the main CWO REZ network project.
On 24 October 2024, ACEREZ submitted a revenue proposal to the AER seeking to recover the costs for the main CWO REZ network project. We have commenced assessing ACEREZ’s revenue proposal. As the revenue proposal was submitted under the contestable framework, we have 42 business days from the date the revenue proposal is submitted to make a revenue determination.
If we find a competitive assessment process to be ‘genuine and appropriate’ then we are able to adopt the outcome of the process in our revenue determination. Key outcomes of a competitive assessment process are the revenues to be recovered by the network operator and the mechanisms by which those revenues can be adjusted. Our Revenue determination guideline for NSW contestable network projects sets out the factors and criteria we take into account when deciding whether a tender process was ‘genuine and appropriate’.
Under the EII Act, ACEREZ is required to be paid by the Scheme Financial Vehicle (SFV) in accordance with our determination. The SFV recovers these costs (and other NSW Roadmap costs) from NSW electricity distributors, who in turn recover these costs from NSW electricity customers via their retail bills.