PIAC responded to the Australian Energy Market Operator’s (AEMO) report into transmission costs for the 2022 Integrated System Plan (ISP).
PIAC generally supports the approach AEMO has taken, in particular, the creation of the Transmission Cost Database (the Database). We consider the Database will increase the transparency and robustness of the ISP and support meaningful engagement of a wider range of stakeholders with the ISP and related processes.
PIAC has two primary concerns with the estimation of transmission costs: the accuracy of the benchmark cost estimates and ensuring the accuracy of Transmission Network Service Providers (TNSP) cost estimates over the long term.
PIAC is deeply concerned about the continued systematic underestimating of transmission costs by TNSPs, and resultant risks of unforeseen long-term bill impacts from ISP projects and inefficient investments. We recommend AEMO consider how the ISP rules and Regulatory Investment Test for Transmission (RIT-T) processes could be changed to limit cost blowouts that impact ISP modelling and result in extra costs for consumers.