Type
Communications
Sector
Electricity
Segment
REZ
Transmission
Issue date
AER reference
AER24009373
Contacts
General enquiries - REZ

The AER has today published a preliminary position paper on Transgrid’s revenue proposal for its Enabling Central-West Orana REZ network infrastructure project (CWO Enabling Project) for the 2026–31 regulatory period.

Transgrid’s revenue proposal focuses on upgrades to the existing NSW transmission system that enables the transfer of energy from the Central-West Orana REZ to major load centres across NSW. This project is considered to be non-contestable and is separate to the main Central-West Orana REZ network project, a project being carried out by ACEREZ.

For the CWO Enabling Project, Transgrid proposed a total capital expenditure of $437.9 million ($2025–26) and a total revenue of $161.1 million ($nominal) over the 2026–31 period.

Our preliminary position paper follows consultation on Transgrid’s revenue proposal and provides an early indication of our assessment. Our preliminary positions are informed by stakeholder submissions and highlight areas of Transgrid’s proposal which we are likely to not accept or consider would benefit from a focused discussion, with feedback sought from stakeholders.

In line with our guideline for NSW non-contestable projects, stakeholder feedback on our preliminary positions will inform our final decision on Transgrid’s CWO Enabling Project revenue determination. We expect to make our final decision in February 2026.

 

All submissions will be made publicly available to facilitate an informed and transparent consultative process, unless otherwise requested. For further information regarding the AER's use and disclosure of information provided to it, see the ACCC/AER Information Policy.

Background

The Central-West Orana REZ was declared by the NSW Minister for Energy under section 19(1) of the Electricity Infrastructure Investment Act 2020 (NSW) (EII Act) in November 2021.

The CWO Enabling Project will enable the CWO Main Project to connect to the NSW transmission network. It also comprises of of upgrades to Transgrid’s existing network in order to allow the transport of electricity generated in the CWO REZ to customers across NSW. In particular, it involves upgrades between the Bayswater and Liddell substations and the Mt Piper and Wallerawang substations. It also includes arrangements to allow the subsequent acquisition and transfer of the Barigan Creek Switching Station (BCSS) from ACEREZ to Transgrid once it has been constructed and approval is given by the Consumer Trustee under the EII Regulation.

In June 2024, the Consumer Trustee authorised Transgrid to carry out the CWO Enabling Project. We received a compliant revenue proposal for the CWO Enabling Project for the 2026–31 regulatory period from Transgrid on 31 July 2025.

Under the EII Act, we are required to scrutinise costs for network operators, such as Transgrid, who are authorised or directed to undertake the network infrastructure projects. Our role is not to decide on the size and timing of these infrastructure projects.

As Transgrid’s revenue proposal was submitted under the non-contestable framework, we have 126 business days from receiving a compliant revenue proposal to make a revenue determination. Our role is to ensure that Transgrid only recovers the prudent, efficient, and reasonable capital costs for undertaking the network infrastructure project.

We will make our determination in accordance with the EII Act, the EII Regulations and our Revenue determination guideline for NSW non-contestable projects.