AER rejects APA Group proposal to regulate Basslink
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The news: The Australian Energy Regulator (AER) has rejected APA Group’s application to convert its Basslink transmission network from the open market into a regulated asset.
The numbers: APA, which acquired the Basslink interconnector between Victoria and Tasmania in 2022 for $773 million, had asked the regulator to allow the conversion that would directly link it into the national electricity grid and help boost returns.
APA Group shares are down nearly 1% at $7.22 in early trading on the ASX.
The context: In its draft decision on Tuesday, the AER said the uncertainty of benefits in different future scenarios compared to the certainty of cost and risk transfer to consumers means that converting Basslink to a prescribed transmission service is unlikely to support the National Electricity Objective at this time.
APA said if the final decision confirms the preliminary ruling, it will proceed to operate basslink as a non-contracted market network service provider and trade capacity in the spot market. Basslink holds a contract with state-owned generator Hydro Tasmania until 30 June 2025.
Separately, the group has agreed with Tamboran Resources and Daly water Energy to build and operate the 37-kilometre Sturt Plateau Pipeline in the Northern Territory to connect the Sturt Plateau gas Compression Facility to APA’s existing Amadeus Gas pipeline. Tamboran and Daly have contracted all foundation capacity in the pipeline until at least 2041.
The sources: AER media release, ASX announcement, ASX announcement
