We have a role in regulating network infrastructure projects under the Electricity Infrastructure Investment (EII) Act 2020 including making revenue determinations for contestable and non-contestable projects and an annual contribution determination that recovers total Roadmap costs.
We have developed guidelines and guidance notes to assist us in undertaking this role.
Under the EII framework, the Infrastructure Planner may undertake a competitive assessment process to select a Network Operator for network infrastructure projects.
The Infrastructure Planner may also undertake a competitive assessment process to select a person who will assist a Network Operator to carry out all or part of a network infrastructure project.
The Infrastructure Planner identifies the project options and the preferred network project, sets the procurement strategy, conducts the competitive assessment process, evaluates the submissions, and selects a successful proponent.
The AER has no direct role in these aspects. However, if the Infrastructure Planner intends to undertake a competitive assessment process, it must consult with us before and during the process and provide information to us if requested.
The AER has an important but discrete role in making a determination on the amounts to be paid to a Network Operator for carrying out a network infrastructure project. The determination must reflect the prudent, efficient and reasonable costs of carrying out a network infrastructure project.
Where the Infrastructure Planner conducts a competitive assessment process, and we are satisfied the process was genuine and appropriate, our determination can adopt the amounts payable to the Network Operator (and any mechanisms to adjust those amounts) as agreed between the Infrastructure Planner and Network Operator (or other service provider) through that process.
This reflects the principle in the NSW regime that a genuine and appropriate competitive assessment process results in the costs of carrying out a network infrastructure project being prudent, efficient and reasonable.
Our approach to making revenue determinations for network operators, selected to undertake infrastructure projects without a competitive procurement process, substantially reflects the approach to economic regulation for transmission businesses under the National Electricity Rules.
Our role is to ensure that the amounts to be paid to Network Operators for constructing and maintaining these network infrastructure projects are efficient, prudent and reasonable.
Under the EII Act, we are required to make an annual contribution determination to ensure the Roadmap's independent Scheme Financial Vehicle has sufficient funds to meet its liabilities.
These liabilities include, for example, the costs of network investment, the costs of underwriting new renewable generation, storage or firming investment, and the administration costs of Roadmap entities.
The annual contribution determinations represents the costs that are to be recovered from NSW consumers.
