The Australian Energy Regulator (AER) has approved cost-cutting for Stage 2 of Transgrid’s HumeLink project.

The AER’s decision has seen the project's capital expenditure slashed by $314.4 million from the initially proposed amount. 

This adjustment brings the approved capital expenditure to $3,964.8 million, down from Transgrid’s original submission of $4,279.1 million, which was later revised to $4,173.4 million.

AER Chair Clare Savage emphasised the thorough evaluation undertaken to ensure that consumers are not overcharged for the project. 

“While HumeLink is a complex project of national significance, we recognise that it affects landholders and local communities on the transmission route and impacts electricity bills,” Savage stated. 

She noted that the AER's assessment process involved scrutinising updated cost estimates and commissioning independent market modelling.

HumeLink, a proposed 500 kV transmission line, is a critical component of the Integrated System Plan designed to enhance the transmission network in New South Wales. 

The project aims to strengthen the grid and provide customers with increased access to generation and storage resources in Southern and Southwest New South Wales.

However, the AER has accepted all of Transgrid’s proposed costs for engagement and social licence activities. 

This acceptance aligns with the regulator’s expectation for meaningful and ongoing engagement with affected communities.

Transgrid has indicated that it will review the AER's determination and await the finalisation of environmental planning approvals and financing arrangements before making a final investment decision on HumeLink.