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ElectraNet has requested that the AER assess its “SA Energy Transformation” proposal to see if it stacks up against a cost-benefit analysis.

ElectraNet’s Regulatory Investment Test for Transmission (RIT-T) explored options for reducing the cost of providing secure and reliable electricity to SA in the near term, while facilitating the longer-term transition of the energy sector across the National Electricity Market.

ElectraNet released its final RIT-T report on 13 February 2019, which identified its preferred investment to build a new 330 kV interconnector between Robertstown in mid-north SA and Wagga Wagga in NSW, via Buronga and with an augmentation between Buronga and Red Cliffs.

On 5 June 2019, the AER commenced the formal process under clause 5.16.6 of the National Electricity Rules (NER) to consider ElectraNet’s request to determine whether the interconnector satisfies the RIT-T cost-benefit analysis. 

The formal process commenced after the AER finalised a dispute on whether ElectraNet’s RIT-T had inadequately considered the consequences of system security risks. 

The AER found that ElectraNet’s RIT-T was compliant specifically on the matters raised in the dispute notice, but the next step would be to consider whether the interconnector meets the broader requirements of the RIT-T cost-benefit analysis.

Under clause 5.16.6 of the NER, the AER has no more than 120 business days to make a determination, subject to requests for further information. The AER expects to make a determination by no later than the fourth quarter of 2019.

An AER determination that ElectraNet’s proposed investment satisfies the requirements of the RIT-T is required before it can make a contingent project decision to amend ElectraNet’s 2018-23 revenue determination and TransGrid’s 2018-23 revenue determination to account for the costs of the project in SA and NSW.

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