• AER's draft decision not to convert Basslink into a regulated TNSP
• Modelling found regulation would provide $1.6 billion in consumer benefits
• APA to progress plans to trade Basslink as a non-contracted MNSP

APA Group (ASX:APA) today announces the Australian Energy Regulator (AER) has released a draft decision not to convert Basslink into a regulated Transmission Network Service Provider (TNSP). The decision follows APA's application in September 2023 to convert Basslink from a contracted Market Network Service Provider (MNSP) into a regulated asset. APA made a commitment during the 2022 acquisition process to seek to convert Basslink to a regulated asset under an agreed consultation process with the Tasmanian Government. The consumer benefits modelling undertaken by ACIL Allen on behalf of the AER as part of the regulatory conversion process found, in 10 of the 12 scenarios considered, that regulation of Basslink provided an average economic benefit to consumers of $1.6 billion for the period 2025 to 2050, compared to the counterfactual scenario of trading electricity as a non-contracted MNSP. If the final decision confirms the draft decision, APA will progress its plan to trade Basslink as a non-contracted MNSP. APA already has the systems in place to bid the asset, as required under the current Hydro Tasmania contract. The revenue contract with Hydro Tasmania will end on 30 June 2025, at which time APA would commence operating as a non-contracted MNSP.

If the final decision confirms the draft decision, APA will progress its plan to trade Basslink as a non-contracted MNSP. APA already has the systems in place to bid the asset, as required under the current Hydro Tasmania contract. The revenue contract with Hydro Tasmania will end on 30 June 2025, at which time APA would commence operating as a non-contracted MNSP.