There are two key checks to ensure major capital investments by Western Power deliver the best outcomes for consumers.

1. Regulatory Investment Test

This test assesses the options for a proposed major network augmentation before committing to its development. This test asks:

• Have all reasonable alternatives been considered?
• Does the proposed option maximise the net benefit for users and consumers?

In the first phase, Western Power consults with all interested stakeholders on the options available.

In the second phase, Western Power submits the proposed option to the Economic Regulation Authority (ERA) who determines whether the network augmentation can proceed.

2. New Facilities Investment Test (NFIT)

If the ERA is satisfied that the proposed upgrade meets the regulatory test requirements, the major augmentation solution Western Power develops and delivers is then assessed against the NFIT criteria.

The criteria considers:

• Is the investment justified?
• Are costs reasonable and efficient?

On completion, should the ERA determine that the augmentation has met NFIT then it will allow the efficient costs to be to Western Power’s regulated asset base and recovered through network tariffs.