Transgrid faces $1.2B EnergyConnect cost rejection

• The Australian Energy Regulator stated Transgrid failed to meet criteria to pass a $1.2 billion cost overrun to consumers.
• Shareholders in Transgrid may need to absorb a larger share of the $1.5 billion EnergyConnect budget blowout.
• Transgrid applied to recover the additional capital expenditure for the 900-kilometre power line via higher customer charges.

Investors in grid owner Transgrid may absorb more costs after regulators flagged a $1.2 billion expense application.

The company sought to pass additional capital expenditure from the 900-kilometre EnergyConnect link onto energy consumers.

Project costs swelled by $1.5 billion above $1.5 billion above the previously approved $2.28 billion consumer-funded budget.

The Australian Energy Regulator stated Transgrid had not met all regulatory criteria required to pass on those costs.

Transgrid shareholders include the Future Fund alongside major Canadian pension funds and sovereign wealth entities from Abu Dhabi and Singapore.

The Australian Energy Regulator is currently gathering public submissions on its preliminary position before issuing a binding final decision.