On 30 September 2020, ElectraNet and TransGrid submitted final contingent project applications to the AER seeking increases to their allowed revenue in accordance with clause 6A.8.2 of the NER to fund the construction of the South Australia (SA) to New South Wales (NSW) interconnector (Project EnergyConnect).

On 24 November 2020, ElectraNet submitted an update to its contingent project application after reaching agreement with the South Australian Government to undertake a range of early works in order to advance the delivery schedule of the project by 9 months.

Project EnergyConnect involves the construction of a new 860 km 330 kV interconnector between Robertstown in mid-north SA and Wagga Wagga NSW, with an augmentation between Buronga and Red Cliffs in north-western Victoria. This project relates to the preferred network investment option identified through ElectraNet’s South Australian Energy Transformation Regulatory Investment Test for Transmission (RIT-T).

We received two separate applications that together cover the total cost of the project:

• TransGrid’s application relates to the NSW component of the interconnector and the revenues it seeks to recover from customers in NSW.
• ElectraNet’s application relates to the SA component of the interconnector and the revenues it seeks to recover from customers in SA.

The AER is required to make a determination on these contingent project applications under clause 6A.8.2 of the NER. 

*Dates are indicative and subject to change.

Interested parties were invited to provide submissions on TransGrid and ElectraNet’s contingent project applications by 30 October 2020. Submissions are now closed. On 24 November 2020, ElectraNet provided a summary response to issues raised in submissions, which is provided below.

On 29 June 2020, TransGrid submitted an initial contingent project application to the AER seeking an increase to its allowed revenue to fund the construction of the NSW component of the project. This application was based on preliminary project cost estimates that were confidential.

On 23 July 2020, we wrote to TransGrid stating that we could not commence the formal public contingent project determination process at that time. This was because TransGrid’s cost estimates were likely to substantially change and were confidential in nature, which meant that the application was not capable of being published in accordance with clause 6A.8.2(c) of the NER.

On 30 September 2020, TransGrid submitted supplementary information that included updated project cost estimates and incremental revenues required to undertake the project. Stakeholders should consider both the June 2020 application and the September 2020 supplementary material when reviewing TransGrid’s contingent project application.

On 24 November 2020, ElectraNet submitted an update to its contingent project application after reaching agreement with the South Australian Government to undertake a range of early works in order to advance the delivery of the project. ElectraNet’s update outlines a revised date for project completion of 31 March 2023, 9 months earlier than previously identified, and a consequential change in the timing of the capital expenditure and revenue required to deliver the project. As a result of these timing changes, ElectraNet’s forecast of total capital expenditure for the contingent project application is slightly reduced to $469 million, and is expected to be incurred entirely within the 2018-23 regulatory control period.