APA Group (ASX:APA) Announces AER Draft Decision on Basslink
AER Draft Decision
APA Group (ASX:APA) has announced that the Australian Energy Regulator (AER) released a draft decision declining to convert Basslink into a regulated Transmission Network Service Provider (TNSP). This decision follows APA’s application made in September 2023 to transition Basslink from a contracted Market Network Service Provider (MNSP) to a regulated asset.
Consumer Benefits Modelling
The AER’s consumer benefits modelling, completed by ACIL Allen, indicates that regulation of Basslink could deliver an average economic benefit of $1.6 billion for consumers from 2025 to 2050 in 10 out of 12 scenarios assessed. In the event the AER finalises this draft decision, APA plans to trade Basslink as a non-contracted MNSP, with operations beginning after the existing revenue contract with Hydro Tasmania expires on 30 June 2025.
Executive Comments
APA Group CEO and Managing Director Adam Watson stated, “Our application to convert Basslink to a regulated asset was progressed following consultation with key stakeholders during the acquisition process.” He added, “If today’s draft decision by the AER is confirmed as final, APA will seek to maximize the value of the asset… in the best interest of APA’s investors.”
Next Steps
The AER’s draft decision remains preliminary, pending further consultations and submissions from APA and other stakeholders before a final decision is issued. APA will engage with the AER and provide updates in line with its continuous disclosure obligations.
Motley Fool contributor Abbie Stokes has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Apa Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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