News today has come out of the Australian Energy Regulator (AER), confirming it has accepted APA Group’s application to convert the Basslink interconnector from a Market Network Service Provider (MNSP) to a regulated Transmission Network Service.
The high-voltage DC cable—linking George Town in Tasmania to Loy Yang in Victoria—has operated as a merchant interconnector since its commissioning in 2006. APA Group acquired Basslink in October 2022, and submitted an application in late 2023 to transition its operations to a regulated service. In December 2024, the AER issued a draft determination to reject the proposal, citing uncertainty around long-term benefits and market implications.
However, in today’s final decision, the AER has reversed its earlier stance. Chair Clare Savage noted that the regulator was ultimately persuaded by detailed stakeholder submissions, expert analysis, and additional information from both APA Group and Hydro Tasmania:
“The change between draft and final decisions reflects the finely balanced nature of the decision and further analysis of the benefits of conversion against different scenarios.”
“When we released our draft determination, we highlighted the need for the AER to very carefully weigh the benefits from a range of potential outcomes and potential future states against the cost and risks for consumers,” Ms Savage said.
With the decision now final, the AER will begin the next step in the process—consulting on the level of revenue Basslink will be allowed to recover under its new regulated status. A consultation paper for this process was also released today, with submissions open until the 11th of July 2025.
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