The AER has made and published a final determination on the 2024 cost threshold review for the regulatory investment test for transmission (RIT-T) and the regulatory investment test for distribution (RIT-D).
Every 3 years, the AER must undertake a review of the regulatory investment test cost thresholds to ensure they remain appropriate. In doing so, we must review changes in input costs associated with these projects and determine whether the cost thresholds need to be changed to reflect any changes in these input costs since the date of the previous review. The input costs for these projects may include costs such as labour and materials.
Our final determination is that if the estimated capital cost of the investment option:
- exceeds $8 million, a RIT-T applies.
- falls below $54 million, a RIT-T proponent can skip the ‘project assessment draft report’ consultation step.
- exceeds $7 million, a RIT-D applies.
- falls below $14 million, a RIT-D proponent can skip the ‘draft project assessment report’ consultation step.
- falls below $28 million, a RIT-D proponent can include its ‘final project assessment report’ as part of its ‘distribution annual planning report’.
- exceeds $103 million, a RIT-T or RIT-D proponent must include reopening triggers applying to the RIT-T or RIT-D project.
- exceeds $300,000, a network business can combine information in its annual planning report for assets it expects to retire or de-rate.
- exceeds $3 million, a distribution network business is required to include, in its distribution annual planning report, committed investments that address an urgent or unforeseen network issue.
The above thresholds remain the same as the thresholds published in our draft determination, for which we received 3 submissions. These submissions have been considered in developing our final determination.
All of the thresholds are an increase on the existing thresholds, reflecting an increase in input costs associated with transmission and distribution projects.