Nexa Advisory welcomes the opportunity to provide a submission on Transgrid’s application to
reopen its 2023–28 transmission revenue determination in relation to Project EnergyConnect
(PEC).
Nexa supports the delivery of nationally critical transmission projects on time and at least cost to consumers. PEC remains an important project for the National Electricity Market (NEM), and Transgrid’s application continues to frame it as a critical interconnector for reliability, security, renewable energy integration and lower wholesale electricity costs – stating that despite the higher cost to complete, it is still expected to deliver approximately $964 million in net market benefits.
Nexa does not seek in this submission to relitigate the detailed contractual history of PEC or to take a position on each legal limb of Transgrid’s re-opener claim.
However, we do consider this application to be further evidence that the current framework remains too weakly oriented toward the outcome consumers actually need: major transmission projects delivered on time and on budget.
Individual project assessments are important, but they do not capture the full system cost of delays to key transmission projects which impact the broader energy transition.
In Nexa’s view, the PEC cost blowout and delays are also a reminder that delivery capability and accountability matter. Where regulated monopoly transmission businesses do not have the experience, incentives or governance settings required to deliver major projects on time and on budget, the current framework has too often allowed the downside to be socialised after the event.
Nexa urges the AER to use this opportunity not only to rigorously assess the PEC application, but also to reinforce the need for broader reform of the actionable ISP and transmission delivery framework. We consider these cost blowouts and delays reflect the weaknesses of the current regulatory framework – which has failed to hold Transgrid to account for timely and on-budget delivery.
Read our submission here: Nexa Advisory submission – AER PEC Re-opener