Review of the cost benefit analysis and regulatory investment test guidelines

On 18 May 2023, the AER commenced review of the cost benefit analysis (CBA) guidelines and application guidelines for its regulatory investment tests (RIT-T & RIT-D) (together the Guidelines review). The RITs are cost–benefit analyses that network businesses must perform and consult on before making major investments in their networks. When undertaking RITs, network businesses must give due consideration to what options are out there, before identifying the best way to address needs on their networks.

Consistent with the requirements of Australian Energy Market Commission’s material change in network infrastructure project costs (MCC) rule determination, the consultation paper aims to provide stakeholders with the opportunity to provide informed and targeted input into the process. The Guidelines review also aims to provide guidance on an issue set out by the AEMC in its transmission planning and investment (TPI) review Stage 2 final report.

On 18 May 2023, we published a consultation paper on the review of the cost benefit analysis (CBA) guidelines and application guidelines for its regulatory investment tests (RIT-T & RIT-D) (together the Guidelines review). We have published the submissions we received.

On 28 July 2023, the AER published draft guideline amendments to the Cost Benefit Analysis guidelines and the Regulatory Investment Test (RIT) application guidelines.

On 6 October 2023, the AER published final amendments to the Cost Benefit Analysis guidelines and the Regulatory Investment Test (RIT) application guidelines.