The Australian Energy Regulator (AER) has today published its decision on Transgrid's contingent project application for its System Security Roadmap Operational Technology project.
Following consultation, the AER’s decision is to not accept Transgrid’s forecast capital expenditure of $163.5 million ($2022–23), which we as assessed not prudent and efficient. We have developed and substituted an alternative forecast for total capex of $64.1 million ($2022–23).
Our alternative estimate for forecast capex is based on a package of work that will deliver part of the outcomes of the preferred option identified from the Regulatory Investment Test for Transmission (RIT-T). Our assessment of Transgrid’s contingent project application found that the additional incremental work proposed to deliver further outcomes was not clearly demonstrated to provide a net benefit to consumers.
The approved project costs will be added to Transgrid’s total maximum allowed revenue for the 2023–28 period. This adjustment will be reflected in customer bills over the final year of this regulatory period (2027–28), with an estimated increase of $0.40 per annum in residential electricity bills for customers in New South Wales.
For this determination, we consider that all trigger events for this contingent project application have been met and the project costs exceed the materiality threshold.
Background
The AER determined the System Security Roadmap Operational Technology project to be a contingent project as part of Transgrid’s 2023–2028 regulatory determination. Transgrid’s proposal sought funding for investments in operational technology that it considered to be required to continue to plan, maintain and operate its network securely as renewable generation increases.
On 8 October 2025, Transgrid published a project assessment conclusions report, finalising the completion of the regulatory investment test for transmission process. The preferred option identified includes upgrades to its operational technology and tools for use in Transgrid’s control rooms and corporate offices. These upgrades are to provide Transgrid with both reactive and proactive capabilities to plan for, and respond to, operational issues.
A contingent project application outlines the amount of revenue a network business seeks to recover from its customers to deliver a project. The AER’s role is to assess whether the trigger event has been satisfied and to review the reasonableness of the proposed costs of the project.