PIAC lodged a submission to the Australian Energy Regulator (AER) in response to TransGrid’s contingent project application for minor upgrades to the Victoria-NSW interconnector (VNI).
PIAC does not have major concerns with the VNI Minor Upgrade if the proposed cost estimate of $45.0 M (real 2017-18) proves to be the actual cost and the resultant upgrade performs as planned.
PIAC is, however, concerned at the prospect of cost escalation between the RIT-T process and final delivered project that typifies projects by TransGrid and other transmission businesses. This has been exemplified by the experience of Project Energy Connect.
PIAC is also concerned by the potential for cost escalations by TransGrid’s choice of a proprietary non-network solution as it limits the potential for competitive pressure to deliver the most efficient price.