ACCC Decides - Electricity investments must deliver net public benifets

22 December 1999
The Australian Competition and Consumer Commission will allow electricity network monopolists to earn a regulated return on investments that deliver net benefits to the public.

"The ACCC's new investment test is designed to allow the regulated networks to make new investments that are in the interests of consumers without adversely affecting the increasingly competitive National Electricity Market", Chairman, Professor Allan Fels, said today.

The new test, which applies to regulated inter-connectors and system augmentations, requires National Electricity Market planners to: compare network investments with alternative options, such as co-generation and energy efficient technologies and practices; take into account the environmental requirements of the governments making up the National Electricity Market; and ensure that investments maximise net public benefits;

"Since being given the function to develop the test in late November this year, the ACCC has moved quickly to finalise the new investment test", Professor Fels said.

Current and future investment proposals can now be completed using the new test developed by the ACCC. This may include an inter-connector between New South Wales and South Australia and an augmentation to improve the reliability of electricity supply to the Sydney Central Business District.

The new test will replace the one developed by the states as part of the original arrangements governing the operation of the National Electricity Market, which was found to be deficient in an earlier assessment of the New South Wales to South Australia interconnector", Professor Fels said.

Copies of the ACCC's decision and the regulatory test can be obtained on the ACCC web site: http://www.accc.gov.au or from Ms Maxine Helmling on telephone (02) 6243 1246.

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Release number: 
MR 250/99
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