The AER has initiated a review of the cost thresholds associated with the regulatory investment test for transmission (RIT-T) and the regulatory investment test for distribution (RIT-D) (2015 cost thresholds review).
The RIT-T and RIT-D are both cost-benefit tests that network businesses must apply before building electricity network infrastructure. The RIT-T and RIT-D only apply to investments above certain cost thresholds. The National Electricity Rules require the AER to undertake a cost thresholds review every three years to ascertain whether in light of changes to input costs, the thresholds listed in clause 5.15.3(b) and (d) of the National Electricity Rules need to be changed to maintain their appropriateness. The review is being conducted in accordance with clause 5.15.3 of the National Electricity Rules.
On 31 July 2015 the AER initiated the 2015 cost thresholds review.
On 2 September 2015 the AER published a draft determination. The AER's draft determination is that:
- for the RIT-T cost thresholds, the $5 million cost thresholds referred to in clauses 5.15.3(b)(1),(2),(3)(4) and (6) of the National Electricity Rules should be increased to $6 million and the $35 million cost threshold referred to in clause 5.15.3(b)(5) of the NER, which was increased to $38 million in the 2012 cost thresholds review be increased to $41 million
- for the RIT-D cost thresholds, the $20 million cost threshold referred to in clause 5.15.3(d)(4) be increased to $21 million and the other RIT-D cost thresholds listed in clause 5.15.3(d) of the National Electricity Rules remain unchanged.
Submissions to the draft determination closed on 9 October 2015. Three submissions were received.
On 5 November 2015 the AER published a final determination upholding the decision of the draft determination.