On 23 May 2023, Transgrid submitted its stage 1 part 2 contingent project application to the AER seeking an increase to its revenue in accordance with clause 6A.8.2 of the NER to fund the early works stage associated with the staged delivery of the HumeLink contingent project. The HumeLink contingent project looks at reinforcing the transmission network in southern NSW.
Interested parties were invited to make submissions on Transgrid's contingent project application by 30 June 2023.
On 25 August 2023, the AER published its final decision in relation to Transgrid's Humelink stage 1 part 2 contingent project application.
Background
HumeLink is a transmission upgrade connecting the Snowy Mountains Hydroelectric Scheme to Bannaby, expanding transmission capacity in southern New South Wales. The project is identified as a necessary upgrade for the National Electricity Market in Australian Energy Market Operator’s (AEMO) Integrated System Plan. The project has also been subject to a Regulatory Investment Test Transmission assessment.
On 17 August 2022, the AER accepted Transgrid’s Humelink stage 1 part 1 contingent project application to seek $71.5 million in revenue, paid by energy consumers, to deliver proposed ‘early works ’for the HumeLink project.
On 23 May 2023, Transgrid submitted Humelink stage 1 part 2 contingent project application to seek $226.7 million in revenue for the procurement of Long Lead Equipment (LLE). This is its second ‘early works’ contingent project application. This includes purchase of transformers, reactors, conductor and steel as part of Stage 1 activities. Transgrid has identified its stage 1 part 2 application will bring the associated cost forward to Stage 1 and reduce its Stage 2 forecast capex by an equivalent amount.
Transgrid will later submit a second stage contingent project application to the AER by the end of 2023 seeking to recover revenue for project implementation costs once the project has been committed to and a final cost estimate is available.
The AER’s role is to review the reasonableness of the proposed costs within the stage 1 part 2 application to ensure consumers pay no more than necessary. The AER expects to make a decision on the application in the coming months.