$5bn cost of HumeLink transmission line to Snowy Hydro 2.0 will add to household and small business bills

NSW households already under pressure amid a cost of living crisis now face paying even more on their electricity bills. Find out why.

NSW households face paying at least $20 a year extra on their electricity bills after a blowout in the already massive cost of a new privately-owned transmission line to the troubled Snowy Hydro 2.0 project.

Documents recently published on the website of the Australian Energy Regulator (AER) also reveal small businesses are likely to have to fork out $50 annually for the 365km line.

The line is called HumeLink and it will be the property of Transgrid, whose key shareholders include a subsidiary of the Abu Dhabi Investment Authority and a Canadian superannuation fund.

Despite being privately owned, over several decades customers will repay the cost of building HumeLink — through power bills.

And that cost is skyrocketing.

In January 2020, Transgrid first estimated HumeLink’s expense would be $1.35bn. That rose to $3.3bn in 2021.

The HumeLink route.

Now, Transgrid is asking the AER to approve an outlay of nearly $5bn.

Critics argue that won’t be the final cost, based on the rapid escalation over the past four years.

“It’s highly likely to be much more than that,” said former ING bank chairman Mike Katz, whose cattle farm is in HumeLink’s intended path.

If HumeLink’s budget does rise further, it would increase the amount customers have to pay through power bills.

Despite the blowout, Transgrid estimates HumeLink will have a $1bn-plus net benefit for households and businesses by lowering wholesale energy costs.

The AER has to approve the project costs and Transgrid must then make a final decision to go ahead.

HumeLink will consist of towers of up to 76 metres, which is taller than the Opera House. The towers will be spaced 300 to 600m apart.

Landowners will be compensated for hosting the line.

Mr Katz said what he had been offered was less than half what his valuer said was fair. He said the offer had to be kept confidential. An extra payment of $200,000 per km of line has been put forward to all landowners.

They want the line to go underground instead.

Snowy Hydro 2.0’s cost has also blown out.

That appears unlikely. Last year a NSW parliament committee was told the cost of going subterranean would be 3.5 times higher.

The documents Transgrid has lodged with the AER say HumeLink stage one “early works” will add $2.80 a year to bills for residential customers and $10.45 annually for small businesses while stage two “delivery” costs will add $20.52 a year for households and $40.78 annually for SMEs.

A Transgrid spokeswoman said it was “keeping the cost to consumers as low as possible as it delivers the transmission projects identified by the Commonwealth and NSW governments as critical to enabling their clean energy vision.

“Given the cost-of-living pressures being experienced by consumers, Transgrid is committed to doing everything it can to put downward pressure on energy costs,” she said.

Other documents Transgrid filed earlier with the AER say its transmission costs for NSW’s renewable energy zones will add $16.81 a year to residential bills and $36.04 annually for small businesses.

The Daily Telegraph recently revealed the recovery of power distributors’ renewable energy zone costs would bump up bills by $20 to $58 a year for households.

Snowy Hydro 2.0 is set to cost at least $12bn, versus a 2017 estimate of $2bn when it was announced by then Prime Minister Malcolm Turnbull. The pumped hydro project has been beset by problems, including that one of the tunnel boring machines was stuck for a year.

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