AEMC draft rule: new planning arrangements for replacement assets by electricity network businesses

On 11 April the Commission made a draft rule for new obligations on network businesses to provide more information on their plans for retirement and replacement of electricity network assets. Under the draft rule, transmission and distribution network businesses would be required to include information on plans to retire network assets or reduce their capability (known as ‘de-rating’) in their annual planning reports. The draft rule also extends the application of regulatory investment tests to include replacement projects. These tests weigh up the costs and benefits of potential network and non-network solutions.

The Commission believes that improving transparency should help providers of non-network solutions, such as battery storage, embedded generation and demand response, to identify investment opportunities in the network and is also likely to assist the Australian Energy Regulator and stakeholders in regulatory decision-making processes such as revenue determinations. Submissions on the draft rule and draft rule determination are due Tuesday 6 June 2017.

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