Regulatory test transitional exclusions
Effective as of the 18 July 2017, the Australian Energy Market Commission (AEMC) has implemented a rule to increase the transparency of network service provider plans to retire, de-rate and replace network assets.
The rule has the effect of including network asset retirement and de-rating information in network service providers' annual planning reports. It also extends the current regulatory investment test frameworks to include replacement expenditure.
The regulatory investment test (RIT-D) for replacement expenditure will commence on 18 September 2017. Replacement capital expenditure incurred after this date must go through the RIT-D process, where the total cost of the most expensive credible option to address the network need is above the cost threshold (currently $5 million for distribution businesses).
To assist in the transition to this new arrangement, the AEMC provided an exemption for replacement projects already committed or replacement projects that would become committed by 30 January 2018. Projects which meet the prescribed criteria are excluded from the requirement to perform a RIT-D.
In accordance with the new rule requirement we must publish and maintain a list of excluded projects on our website
s, until all the projects are completed.
Regulatory investment test for distribution - excluded projects
In accordance with the transitional arrangements relating to excluded projects under clause 11.99.5 of the National Electricity Rules, the following replacement projects are excluded from the requirement to undertake the regulatory investment test for distribution.
|Project Name||Description||Scheduled Completion Date|
|Project : LV 7/.064 Copper Conductor Replacement program||7/.064 Copper conductor was last installed in the 1970s. It is very thin conductor and over time has become brittle and eroded. A steadily increasing volume of failures have been occurring, each creating potentially dangerous situations for the public and staff working on the asset. A program has been developed to remove and replace the conductor.||2020|
Project : Low Voltage Spreader Installation
|A large proportion of our 24,000 circuit kilometres of LV conductor is bare overhead conductor. Clashing and breakages occur as a result of faults and the environment. The problems have been exacerbated due to the proliferation of 7/.064 conductor, which is increasingly prone to failure. Spreaders and LV transformer fuses are being installed to reduce the risk of LV conductor failure, allow sufficient time to complete the LV copper replacement program and improve resilience of the network under cyclonic wind conditions.||2020|
|Project : 1202738 Yarranlea substation rebuild||The substation is the primary source of supply for the Yarranlea district west of Toowoomba. The site is a 110kv bulk supply point. Oil sampling and individual asset condition assessments have revealed a number of assets (including both power transformers) are at or beyond economic end of life and will require increased and ongoing maintenance. Risk of failure of individual assets is high. Both fixed tap transformers are considered at end of life, and their associated regulators are failing. Transformer protection is minimal, and substation loading is above N-1 every summer. Backup capability for other parts of the network are no longer viable. The substation no longer meets the Safety Net requirements of Ergon Energy’s Distribution Authority.||2020|
|Project: Tennyson Street Zone Substation Replacement||Tennyson Street 33/11 kV Zone Substation is located in the central region it is a 50 year old substation with the majority of the existing asset infrastructure past its operational life expectancy. A substation review has been performed by Ergon Energy’s Network Planning and Refurbishment group identifying limitations and risks associated with aged assets, deteriorating equipment condition and performance, operational and safety concerns and capacity constraints. Rebuilding the substation will ensure that security of supply is met well into the future, mitigate identified risks and provide a safe reliable quality of supply for the commercial and residential customers in the Mackay region.||2020|