Under the Access Code an augmentation in relation to a covered network, means an increase in the capability of the covered network to provide covered services, including by the development, construction, acquisition or commissioning of new network services.

Regulatory Test

The Regulatory Test is an assessment of whether a proposed major augmentation maximises the net benefit after considering alternative options. A major augmentation is an augmentation that exceeds $5.4 million for a distribution system and $16.2 million for a transmission system (2007 CPI adjusted amounts).

The Regulatory Test requires a service provider to submit a major augmentation proposal, for its proposed major augmentation, to the Economic Regulation Authority (ERA) in accordance with the Access Code. Once submitted, the ERA must make and publish a determination within 25 or 45 business days, depending on whether or not public consultation is sought.

Detailed information regarding the Regulatory Test can be located under Chapter 9 of the Access Code.

New Facilities Investment Test

Under the Access Code a service provider may at any time apply to the ERA for it to determine whether actual or forecast new facilities investment, made or proposed, meets or will meet, the new facilities investment test (NFIT). If met, the new facilities may be added to the capital base of a covered network and recovered through network tariffs applied to users of the network.

More information regarding the NFIT can be located under section 6.52 of the Access Code.

Major Augmentation Proposals

A service provider may either submit a major augmentation proposal for a regulatory test assessment as part of its proposed access arrangement or not. Where a major augmentation proposal is submitted outside an access arrangement approval process, the proposal may include a request to give prior approval in respect of the new facilities investment (i.e. an application for a NFIT).

The following network augmentations have been submitted to the ERA under the Access Code for a determination as to whether the augmentation meets the Regulatory Test and/or the new facilities investment test (NFIT) .