Regulator rejects community challenge to VNI West transmission plans

The Australian Energy Regulator has dismissed a community-based challenge to the Victoria to New South Wales Interconnector West, ruling that the developers of the controversial transmission project do not have to go back to the drawing board on its design.

The $3.4 billion VNI West project is one of the more contested parts of the Australian Energy Market Operator’s 30-year planning blueprint, attracting criticism from affected communities over visual and environmental impacts and from some analysts over whether it offers best value for money and integration of renewables.

AEMO Victoria Planning (AVP) and Transgrid in May set out their preferred route for the 500kV double circuit transmission line, starting on the north-west outskirts of Melbourne and stretch over 800km to Wagga Wagga in the south west of NSW, via Bulgana, Kerang and Dinawan in Victoria.

The new route, which the proponents say will support upwards of 3.4GW of renewables capacity across Murray River REZ and Western Victoria REZ, did not appease critics.

In June, a notice of dispute challenging the methods used to determine it was submitted to the AER by one of VNI West’s most vocal opponents, the Moorabool and Central Highlands Power Alliance.

In a statement on Tuesday, the AER said that after considering the dispute by the Alliance, it had determined that  the grounds raised did “not provide a basis to require AVP and Transgrid to amend their VNI West RIT-T PACR,” referring to the regulatory investment test process used to identify the best transmission investment option.

The Alliance had raised the dispute with the VNI West RIT-T on nine grounds, leading with the argument that it had failed to “maximise the present value of net economic benefit to all those who produce, consume and transport electricity in the market.”

Other arguments included that AVP and Transgrid did not comply with consultation requirements, or with various other obligations required under the national energy rules.

The AER said in its determination documents that its review of the dispute was assessed against the RIT-T requirements and its determination had been made, “taking into account the national electricity objective.”

The regulator specifies that for grounds 1- 5, it has determined that AVP and Transgrid are not required to
amend the VNI West RIT-T PACR.

On grounds 6 – 9 it found these did “not relate to the application of RIT-T or fall under other categories under … the NER for which a dispute may be raised. Accordingly, we are required to reject these grounds of dispute.”

The AER did, however, find that the Alliance satisfied the definition of ‘interested party’ giving it a right to bring its dispute.

“We are satisfied that for the purposes of cl 5.15.1 of the NER that MCHPA represents users that have the potential to suffer a material and adverse NEM impact from the investment identified as the preferred option in the VNI West PACR,” the determination says.

In a Facebook post on Tuesday, the Alliance notes the AER’s findings and says it is “seeking legal advice in relation to the determination.”

The group also notes that the AER dispute is separate to the Alliance’s Supreme Court challenge at trial in September against the Victorian government’s ministerial orders, “which awaits the judge’s decision.”