Financeability of ISP projects derogation draft determination 

Financeability of ISP projects derogation draft determination  Alternative formats available on request to PIAC - Contact PIAC

Financeability of ISP projects derogation draft determination 
Publication Date:
18 Mar 2021
Publication Type:
PIAC lodged a submission to the Australian Energy Market Commission’s (AEMC) draft determination on a proposal from TransGrid and ElectraNet to change how consumers pay for the major transmission projects, including the Project EnergyConnect interconnector between SA and NSW, identified in the Integrated System Plan.

PIAC strongly supports the AEMC’s decision not to make a change and supports the conclusions that: 

  • There are sufficient options available within the current regulatory framework to allow networks to recover efficient financing costs; 
  • The proposed derogation would inappropriately transfer risk from TransGrid to consumers;

  • The proposed derogation would inefficiently bring forward costs to current consumers, substantially increasing costs to consumers in the near- to medium-term; and 

  • The proposed derogation would weaken incentives to deliver projects on time and would provide an unfair advantage to TransGrid above other proponents and similar projects. 

PIAC welcomes the AEMC and other market bodies commencing a broader review to consider these matters to consider matters more holistically and with appropriate time to fully explore the issues and implications for consumers. Such a review is timely and far more appropriate than pursuing ad hoc derogations on project-specific issues which risks creating ratcheting costs for consumers as well as undermining certainty and confidence for stakeholders.

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