The AEMC yesterday published its final determination for improving cost recovery arrangements for transmission non-network options.
The rule change introduces a number of key changes to how TNSPs implement non-network options being used as alternatives to network augmentation, such as the ability to seek AER approval of a pricing methodology for the NNO use and costs moving forward (to give greater certainty to being able to obtain an allowance or pass through in future), plus the ability to adjust their network support allowance mid regulatory period if a new NNO is contracted.
The changes are an important step forward towards reducing barriers to the uptake of NNOs to support the transmission network, and are intended to also assist financeability of new NNO projects by supporting greater revenue certainty.
This rule change is the latest in a number of changes looking at NNOs, and follows the improving security frameworks for the energy transition rule change in March 2024 that looked at use of NNOs for system security purposes.
We expect that the Rules will continue to evolve in the treatment of NNOs, as there is greater uptake and their value to the system is realised. We look forward to working with our clients on the application of the new rules to support their projects.
