Type
Communications
Sector
Electricity
Segment
REZ
Transmission
Issue date
AER reference
AER26012456
Contacts
General enquiries - REZ

The Australian Energy Regulator (AER) has published its decisions on the 2026–27 annual adjustment proposals from Transgrid and Ausgrid relating to their revenue determinations for NSW non-contestable Renewable Energy Zone (REZ) network projects.

This follows an assessment by the AER of each Network Operator’s revenue adjustment proposal, per the Electricity Infrastructure Investment Act 2020 (NSW) (EII Act) and the Electricity Infrastructure Investment Regulation 2021 (NSW) (EII Regulation), to ensure the proposed adjustments are consistent with each Network Operator’s revenue determination and our Non-contestable Guideline.

The approved revenue adjustments are:

Transgrid

  • Waratah Super Battery – Network augmentation and SIPS control system – decrease of $0.1 million (0.1%) relative to the previous determination of $106.1 million. The decrease in revenue is due to the replacement of placeholder financial inputs with actual financial inputs.
  • Enabling Central-West Orana REZ Network Infrastructure Project – increase of $3.7 million (2.8%) relative to the previous determination of $128.9 million. The increase in revenue is due to the replacement of placeholder financial inputs with actual financial inputs.

Ausgrid

  • Hunter-Central Coast REZ Network Infrastructure Project – increase of $11.1 million (5.8%) relative to the previous determination of $189.6 million. The increase in revenue is due to an increase in contractor costs and the replacement of placeholder financial inputs with actual financial inputs.

We have published a statement of reasons, an updated revenue model and updated quarterly schedule of payments (derived from the above approved revenue adjustments) for each non-contestable determination. The contribution determination for 2027–28 will incorporate the updated quarterly schedule of payments, which will ultimately be recovered from NSW electricity customers. 

In addition, we recently approved revenue adjustments to two contestable components of the Waratah Super Battery (Paired Generation and SIPS battery service). To provide transparency to consumers on the total costs of the Waratah Super Battery project, we have aggregated the annual and total payments for the two contestable components alongside the non-contestable payments here.

Background

The AER makes non-contestable revenue determinations under the EII Act and the EII Regulation. Under this framework, a revenue determination may include provision for the adjustment of any amount included in the revenue determination (adjustment mechanism).

Our revenue determinations approved the inclusion of several adjustment mechanisms that are intended to account for risks that are outside a Network Operator’s control and cannot be efficiently mitigated through other means. The adjustment mechanisms set out what must occur for the adjustment to be triggered, our expectations on what information should be provided to support the proposal, and how any adjustment is calculated and applied.

The adjustment proposals included several routine adjustments to replace placeholder financial inputs with actual financial inputs. The proposals also included non-routine adjustments for expenditure. For these non-routine adjustments, we assessed whether the trigger for the adjustment occurred and whether the proposed costs are prudent, efficient and reasonable. Based on our assessment, we determined an updated maximum allowed revenue and quarterly schedule of payments.