On 27 February 2026 the AER announced it had published its final decision on “the revenue that Basslink Pty Ltd (Basslink) can recover for the Basslink transmission cable for the 2026-30 period as a regulated service”.
This follows the June 2025 decision to accept Basslink’s application to convert its market network service to a prescribed transmission service.
Up until June 30, 2025, there was an agreement between Basslink and TasHydro on how Basslink (currently a MNSP – market network service provider) should be bid. That agreement ended June 30. In July we noted how Basslink had subsequently been more selective in how the asset was used in Basslink flows shift since end of agreement on 30th June 2025.
The revenue in the 2026-30 period
AER states:
Our final decision allows Basslink to recover $459.5 million ($ nominal, smoothed) in revenue
from its customers for the 2026–30 regulatory control period (2026–30 period). This is $1.7
million (or 0.4%) less than Basslink’s revised proposal of $461.2 million.
Cost Recovery
The final decision also includes how the revenue recovery would play out – the split between Victorian and Tasmanian coordinating network service providers:
Under Basslink’s proposed cost allocation,
75% of Basslink’s revenue will be recovered from Victorian customers and
the remaining 25% from Tasmanian customers.
The decision attempts to estimate how these costs would impact residential and small business customer bills. Coarsely, this indicated a small increase to bills in year 1 then generally flay in years 2 to 4 of the period. Yet it also notes that the relative benefits depend on Basslink’s reliability.
FCSPS
The FCSPS is the Frequency Control Special Protection Scheme. The FCSPS allows the Basslink interconnector to operate at its full capacity rather than restricting flows to 144MW in each direction (to manage frequency change under a trip event). This supports higher Basslink utilisation.
We noted one likely instance of the FCSPS being triggered in 2025 in Tasmanian demand drop on 16 August 2025 – part 2.
The decision states that Basslink is in negotiations to provide services to support the scheme. These, we gather, would be generator and load tripping services. Costs for these services would be recovered “outside the revenue determination via the annual transmission pricing and network support pass through processes”. The decision suggests we can anticipate these will be made public in due course.
Conversion
Ultimately, the decision notes, APA as the owner of Basslink will determine whether Basslink does convert its market network service to a prescribed transmission service from July 2026.
We’ll be on the lookout for announcements to that effect.
How is the money actually raised to pay Basslink? Is it simply extra TUOS charges in Tasmanian and Victorian consumers bills? On Ruth Forrest’s website she said the money comes from the IRSRs (https://ruthforrest.com.au/uncategorised/hydros-challenges-are-part-of-a-system-wide-pattern-affecting-every-other-major-public-entity-in-the-state/). And I have also heard that the money doesn’t come from the IRSR but from the proceeds of the IRSR auction…
Any information, especially with AEMO or NER sources, would be really appreciated.