Today, we are commencing consultation on Transgrid’s hybrid revenue proposal for the System Strength Project for the 2026–31 regulatory period.
This is a Priority Network Infrastructure Project, under the NSW Electricity Infrastructure Investment Act 2020 (EII Act), and will deliver 10 synchronous condensers across 5 locations in NSW to meet system strength needs.
It’s the first time under the EII Regulation that we are making revenue determinations for infrastructure projects that combine both contestable and non-contestable components in one revenue determination. We refer to these as hybrid revenue determinations.
Transgrid’s revenue proposal contains three main elements: the provision of synchronous condensers; associated works enabling the installation and connection of the synchronous condensers, and Transgrid integration works. For this project, it proposes total operating expenditure of $60.1 million ($September 2026) over the 2026-31 regulatory period and total project capital expenditure of $1,185 million ($September 2026). To fund this project, Transgrid proposes to recover revenues of $400.8 million ($nominal) from consumers over the 2026-31 regulatory period.
Our role is to ensure that Transgrid only recovers the prudent, efficient, and reasonable costs for undertaking the network project. We do not have a role in relation to the scope or timing of the project.
In line with our Revenue determination guideline for NSW non-contestable projects, we are taking a staged approach in making a determination for this proposal.
This first round of consultation will help identify focus issues for our preliminary position paper, which will be published in June for further stakeholder feedback. We then have 126 business days to make a revenue determination.
We expect to make our final decision by 21 October 2026.
