PIAC responded to the Australian Energy Market Commission’s (AEMC) review of transmission planning and investement.
Over coming decades tens of billions of dollars in new network investment will be required to bring about the transition. It is critical this investment is subject to a robust, transparent and fit-for- purpose regulatory regime that ensures it is in the consumer interest and does not burden them with costs they do not benefit from and risks they cannot manage.
We highlight existing planning and investment arrangements are not fit-for-purpose as they no longer ensure costs of investment are recovered on a beneficiaries-pay basis and do not allow risk to sit with those best-placed to manage it. The result is inefficient transmission investment, leaving consumers with unfair and unmanageable costs and risks and slowing the deployment of renewables.
PIAC recommends the AEMC prioritise comprehensive reform to cost and risk sharing for transmission investment and look at ways it can encourage efficient and timely investment where it is needed. To this end, we support the intent of the material change in network infrastructure project costs rule change.
PIAC does not recommend this review focus on widening the range of benefits which can be included in assessment processes or in any way weakening the Regulatory Investment Test for Transmission (RIT-T). Neither of these measures are key to the delivery of efficient and beneficial projects, and risk allowing and encouraging over-investment for which consumers will pay for decades.
