The Australian Energy Regulator has today published our approved costs for Transgrid’s stage 1 (early works) contingent project application for the NSW portion of the Victoria to NSW Interconnector West (VNI West).
Following a detailed review of Transgrid’s application, we have approved capex of $948.8 million for stage 1. This is a reduction of $147.5 million or 13.5% from the $1096.3 million proposed by Transgrid.
Our detailed review of Transgrid’s application found that a portion of the proposed contingency costs, biodiversity offset costs, and social licence costs were not prudent and efficient. For the portion of biodiversity and social licence costs we did not accept, we considered these more suitable for the stage 2 application following progression of environmental planning and approvals and further engagement with affected communities.
The average annual bill impact will be $6 for residential customers over the 2023-28 regulatory period.
Following this decision, Transgrid will continue undertaking its stage 1 activities and later submit a stage 2 contingent project application to us seeking to recover revenue for project implementation costs.