EUAA Submission: Review Of CBA & RIT Guidelines
Emily Wood | September 7, 2023
‘…The EUAA was one of the proponents of the Material Change in Network Infrastructure Costs rule change. While our proposal covered both transmission and distribution projects, our focus was on large transmission projects, particularly ISP projects. Our original proposal in January 2021 highlighted the significant increase in ISP project costs over the course of the RIT-T process and leading up to the contingent project application1. The evidence of significant cost increases we provided in our original application and observed most recently with Humelink and Marinus, shows why we made our rule change application.
We argued that allowing the project proponent to determine whether a material change had occurred meant that consumers had no confidence that the project met the net benefits test. It is difficult to trust project proponents to undertake the assessment of material change in a transparent way given there is a significant incentive for them to continue on with the project regardless of cost increases. Compounding this is the huge information asymmetry between the proponent and consumers that makes it almost impossible for consumers to fully interrogate the complex workings of the project model….’
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