AGL questions the need for proposed financeability of ISP projects rule change

AGL has provided a submission in response to an AEMC consultation on rule change requests from TransGrid and ElectraNet which seek to change the economic regulatory framework for Integrated System Plan (ISP) projects.

The proposed rules are intended to improve the financeability of ISP projects including Project Energy Connect (PEC), a proposed electricity transmission line connecting the South Australia and New South Wales regions of the NEM. However, as the submission notes, PEC has already been approved by the AER as a credible option with a robust business case, so it is unclear that the rule change is required. The proposed rule would allow TransGrid and ElectraNet to recover their revenue earlier than under the existing rules, which is likely to lead to the misallocation of costs to consumers since more value from network investments is typically received later in the project life. For these reasons, AGL has suggested that the rule changes should not be enacted.

Read the full submission here.