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Regulatory test transitional exclusions

Effective as of 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 requires us to include network asset retirement and de-rating information in our annual planning reports. It also extends the current regulatory investment test for distribution (RIT-D) frameworks to include network asset replacement expenditure.

From 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 network asset replacement projects already committed or that would become committed by 30 January 2018. Projects which meet the criteria are excluded from the need to perform a RIT-D.

In accordance with the new rule, we must publish and maintain a list of excluded projects on our website, until all of these projects are completed.

Excluded projects

Under the transitional arrangements, the following network asset replacement projects are excluded from the need to perform a RIT-D (refer to clause 11.99.5 of the National Electricity Rules).

Project NameDescriptionScheduled Completion Date
Project : LV 7/.064 Copper Conductor Replacement program7/.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 rebuildThe 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 ReplacementTennyson 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
Project : 552296
Dysart Substation
Dysart substation is an existing 132/66/22kV substation in central Queensland jointly owned by Powerlink and Ergon Energy. It's considered a critical site for supplying a number of coal mines connected at 66kV, as well as supplying both the Dysart township and rural loads at 22kV. Powerlink have identified the need to replace their 2 x 132/66/22kV power transformers at this site. In order to eliminate disproportionate operational costs in maintaining poor condition and end-of-life plant, we have identified the need to concurrently install 2 x new 66/22kV 20MVA transformers and transformer bays, as well as replace the aged and deteriorated CBs and VTs.2019
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