The Australian Energy Regulator (AER) has received a contingent project application from TransGrid to increase its allowed revenue to fund the expansion of capacity in the Victoria-New South Wales Interconnector (VNI).
This application relates to TransGrid’s preferred network investment option identified through the Victoria to New South Wales Interconnector Upgrade Regulatory Investment Test for Transmission (RIT-T) completed in February 2020. This investment is consistent with Optimal Development Path (ODP) as identified in the 2020 Integrated System Plan. TransGrid has proposed total capital expenditure of $47 million (real 2017-18) to deliver the project within the 2018–23 regulatory for delivering the NSW component of VNI minor. TransGrid expects the project to increase average household bills in NSW by $0.20 in the 2021-22 financial year.
We are concurrently assessing TransGrid’s RIT-T and contingent project application as part of an expedited regulatory process for the VNI minor upgrade. We expect to make our determination on the RIT-T and contingent project application around the end of the first quarter of 2021.
Funding for a contingent project is permitted under clause 6A.8.2 of the National Electricity Rules through an adjustment to the maximum allowed revenue under TransGrid’s 2018–23 revenue determination.
Our role is to determine the prudent and efficient capital and operating costs required to expand the capacity of VNI, and the incremental revenue that TransGrid may recover within the 2018–23 regulatory control period as a result of undertaking the project.
Invitation for submissions
Interested parties are invited to make submissions on TranGrid’s contingent project application by 21 December 2020.
Submissions should address matters relevant to the AER's contingent project determination, including the proposed amounts of capital and incremental operating expenditure required for the purpose of undertaking the contingent project, and the incremental revenue likely to be required by TransGrid as a result of undertaking the contingent project.
The AER prefers that all submissions be sent in an electronic format in Microsoft Word or other text-readable document form and publicly available, to facilitate an informed, transparent and robust consultation process. Submissions should be emailed to AERinquiry@aer.gov.au with the subject line: TransGrid – VNI minor upgrade contingent project application.
Alternatively, submissions can be sent to:
Mr Sebastian Roberts
Australian Energy Regulator
GPO Box 520
Melbourne Vic 3001
Submissions will be treated as public documents and posted on the AER's website unless prior arrangements are made with the AER to treat the submission, or portions of it, as confidential. Those wishing to submit confidential information are requested to:
- clearly identify the information that is the subject of the confidentiality claim; and
- provide a non-confidential version of the submission.