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Grid Australia contributes to the development of the Regulatory Investment Test - Distribution

25 February 2013

Grid Australia provided a submission to the Australian Energy Regulator (AER) on its Regulatory Investment Test for Distribution (RIT-D) Issues Paper.  The submission focussed on areas where there were clear issues with the use of the existing Regulatory Investment Test - Transmission (RIT-T) as a 'prototype' in establishing a new RIT-D.  Key points included:

  • Cost estimates for options considered under the RIT-T (and RIT-D) are in many cases high-level estimates primarily used to rank options.  The AER should be mindful of the relative accuracy of the estimates  upon which the regulatory investment test was conducted, when undertaking any ex-post project assessment;
  • The proposed removal of the 'do nothing' base case for reliability-driven augmentations from the RIT-D analysis will prevent unnecessary analysis, and Grid Australia supports a similar change for the RIT-T through a revision of the AER's RIT-T guidelines;
  • Recommending a number of process areas which could benefit from further AER guidance in both the proposed RIT-D and existing RIT-T guidelines; and
  • Seeking to retain the same terminology across the RIT-T and RIT-D for market benefit categories.

Read the submission PDF [449.99 kB]

Submissions