TransGrid - Cost pass through - 2019-20 Bushfire season

Sector: 
Segment: 
Status: 
Commencement date: 
13 November 2020
Effective date: 
1 July 2021
Service provider/Asset: 
Contact: 
AER General Inquiries AERInquiry@aer.gov.au

Overview

On 13 November 2020, TransGrid submitted a cost pass through application seeking to recover costs in relation to the 2019-20 bushfires in New South Wales. The bushfires impacted 9 per cent of TransGrid’s transmission line route length and its 2,681 transmission line structures.

TransGrid submits its response and restoration effort to address the 2019-20 bushfire season has a material impact to the cost of providing prescribed transmission services and constitutes a natural disaster pass through event. To recover these costs TransGrid proposes a positive pass through amount of approximately $53.2 million ($nominal), or $55.5 million ($nominal) when smoothed over the last two years of the 2018–23 period. 

On 4 May 2021, the AER determined that a cost pass through was appropriate and meets the National Electricity Rule requirements. However, the AER has determined that some costs originally proposed by TransGrid should not be included and that the pass through amount should be recovered from electricity users over a longer time frame. The AER approved a pass through amount of $49.8 million ($nominal) to be recovered over the following three regulatory years: 

  • $15,663,472 ($nominal) to be recovered in 2022–23
  • $16,593,229 ($nominal) to be recovered in 2023–24
  • $17,578,174 ($nominal) to be recovered in 2024–25.

Consultation

We invited interested parties to make submissions on TransGrid's cost pass through application. Submissions have now closed. We received two submissions.