Victorians to pay for $25 billion transmission line rollout

The companies building Victoria’s transmission projects will recover the cost by passing the charges onto households and businesses. See the figures.

Households can expect their electricity bills to rise by at least 50 per cent and businesses up to 350 per cent to repay the cost of new transmission lines and upgrades.

Victorian households and businesses face massive hikes in their power bill as they are forced to repay the $25 billion cost of constructing and financing a raft of new transmission projects over the next decade, says energy analyst Bruce Mountain.

“To put this number into perspective, the regulated asset value of all transmission assets in Victoria today is $3.9bn,” Professor Mountain, who is a director of the Victorian Energy Policy Centre, said.

But the value of that asset base is set to soar as the Allan Government strips away barriers to rolling out the Western renewable Link, VNI West, Marinus Link one and two, plus seven transmission upgrades, synchronous condensers and other extensions outlined in the recently released draft Victorian Transmission Plan.

All these project would “increase the total value of transmission infrastructure charged to electricity consumers in Victoria by $22bn or 554 per cent”, Prof Mountain said.

AusNet and other companies building the new transmission projects will also be able to recover their borrowing costs from electricity consumers, which Professor Mountain said would lift the total to $25bn.

“This can be expected to raise electricity bills for household customers by at least 50 per cent from what they otherwise would be,” he said.

“Large customers, for whom electricity costs are around 50 per cent of their bill, can expect their bills to be 250-350 per cent higher than they otherwise would be.”

Victorians are already paying AusNet $426 million in regulated revenue on its $3.9bn transmission network, with the Allan Government creaming off another $264m in easement taxes, which AusNet also collects as part of the supply charge on every Victorians power bill.

As the network grows so will the government’s tax take, which has already jumped from $111m a decade ago to a forecast $268m in 2025-26.

The Victorian Government's tax on transmission easements over the past decade.

Some stakeholders criticised Professor Mountain’s estimates as too high, especially that of the Western Renewables Link project, which he put at $4.2bn.

In 2023 AusNet, which is building WRL, stated the cost of building WRL was $1.05bn.

But WRL recently announced a two-year delay in construction, until late 2029 and refused to state what the final project cost would be when asked this week.

“We are working to manage project costs, including landholder, neighbour and community benefits, to keep costs down for consumers,” an AusNet spokeswoman said.