The Australian Energy Regulator (AER) has today commenced public consultation on revised contingent project applications it has received from TransGrid and ElectraNet for Project EnergyConnect.
Project EnergyConnect is a proposed new transmission line linking South Australia and New South Wales with an added connection to north west Victoria. The AER's role is to determine the prudent and efficient costs reasonably required to deliver the project and the amount of incremental revenue the businesses may recover from consumers in South Australia and New South Wales in the 2018–23 regulatory control period.
The AER is seeking public submissions on the additional material provided by TransGrid and ElectraNet in response to the AER's preliminary position published in December 2020, principally in relation to:
- the occurrence of the project trigger event in terms of the businesses' commitments to proceed with the project, and
- the forecast capital expenditure required to deliver the project.
Following this consultation process, the AER will make a final determination on the contingent project applications as soon as practicable.
The National Electricity Rules provide a period of 40 business days for the AER to make a determination following receipt of a contingent project application.
Making a determination on the revised contingent project applications is the AER’s final role in the process for Project EnergyConnect.
Background
The revised contingent project applications from TransGrid and ElectraNet respond to preliminary position papers published by the AER in December 2020. At that time, the AER considered that it was unable to make a final determination on TransGrid and ElectraNet's applications because the businesses had not yet committed to proceed with the project as required by the defined contingent project trigger event. Our preliminary assessment was that the prudent and efficient capital cost for the project was $2.15 billion, a 9 per cent reduction from the $2.4 billion initially proposed by TransGrid and ElectraNet.
TransGrid and ElectraNet have responded to the AER's preliminary position on forecast capital expenditure required to deliver the project, and provided Board resolutions committing the businesses to proceed with the project. The total project cost now proposed by TransGrid and ElectraNet is approximately $2.33 billion. In making a decision on the applications, the AER will review TransGrid and ElectraNet’s proposals together so the full cost of the project is considered as part of the process. The AER will review the reasonableness of the proposed cost of Project EnergyConnect with the aim of ensuring consumers pay no more than necessary for the project.
The AER consulted on TransGrid and ElectraNet's initial contingent project applications in October 2020.
Submissions
We invite energy consumers and other interested parties to make submissions on the revised contingent project applications for Project EnergyConnect by Monday, 17 May 2021.
Submissions should be emailed to: contingentprojects
aer [dot] gov [dot] au (subject: Submission%20on%20PEC%20contingent%20project) (contingentprojects[at]aer[dot]gov[dot]au)
Alternatively, you may mail submissions to:
Mr Sebastian Roberts
General Manager
Australian Energy Regulator
GPO Box 520
Melbourne, Victoria, 3001
We prefer that all submissions be publicly available to facilitate an informed and transparent consultative process. We will treat submissions as public documents unless otherwise requested. All non-confidential submissions will be placed on the AER's website. For further information regarding the AER's use and disclosure of information provided to it, see the ACCC/AER Information Policy.
We request parties wishing to submit confidential information:
- clearly identify the information that is the subject of the confidentiality claim
- provide a non-confidential version of the submission in a form suitable for publication.