On 22 December 2023, Transgrid submitted its stage 2 contingent project application to us seeking an increase to its revenue to fund the staged delivery of the HumeLink contingent project in accordance with clause 6A.8.2 of the NER.
On 2 August 2024, we published our decision in relation to Transgrid's Humelink stage 2 contingent project application.
Background
HumeLink is a transmission network upgrade connecting the Snowy Mountains Hydroelectric Scheme to Bannaby, expanding transmission capacity in southern New South Wales.
HumeLink is an actionable project as part of AEMO’s Integrated System Plan (ISP), which addresses an identified need in the Draft 2024 ISP and received AEMO feedback loop confirmation on 21 December 2023 and 8 July 2024.
Transgrid published its draft stage 2 contingent project application in December 2023 and noted that, given the increase in estimated costs since it published the project assessment conclusions report, it was updating its RIT-T NPV analysis to confirm that there is no change in the preferred option to deliver HumeLink. On 19 January 2024 we formally requested that Transgrid provide its updated analysis. Transgrid has now published this analysis on its website.
On 17 August 2022, we accepted Transgrid’s HumeLink stage 1 part 1 contingent project application to seek $71.5 million ($ nominal) in revenue, paid by energy consumers, to deliver proposed ‘early works’ for the HumeLink project.
On 25 August 2023, we accepted Transgrid’s HumeLink stage 1 part 2 contingent project application to seek $38.5 million ($ nominal) in revenue for the procurement of Long Lead Equipment. This included the purchase of transformers, reactors, conductor and steel as part of stage 1 activities.
On 22 December 2023, Transgrid submitted its HumeLink stage 2 contingent project application to us seeking $619.6 million ($ nominal) in revenue over the 2023–28 period for project construction and implementation costs to the scheduled completion in the second half of 2026.
On 8 July 2024, Transgrid notified us that AEMO provided a further feedback loop assessment of the project based on the Final 2024 Integrated System Plan.
Our role is to review the prudency and efficiency of the proposed costs within the stage 2 application to ensure consumers pay no more than necessary. We have 40 business days from receiving the application or responses to information requests to make our decision.