Fixed Capital Charge
Fixed Capital Charge
The Government is targeting a 1 July 2026 commencement for the Fixed Capital Charge.
The Government will amend the Electricity Network Access Code 2004 (Access Code) to implement the Fixed Capital Charge. The Access Code change process will be undertaken in 2026 and will be led by Energy Policy WA.
Legislative and regulatory changes will be required to implement the Fixed Capital Charge.
The information provided in this FAQ should be considered indicative until the legislative and regulatory changes are implemented.
Energy Policy WA has published a Consultation Paper with additional information on the Fixed Capital Charge.
Energy Policy WA is seeking comments on the Fixed Capital Charge – please provide submissions to EPWA-info@deed.wa.gov.au by Wednesday 21 January 2026.
Consultation on drafting of the amendment to the Access Code will be conducted in the first half of 2026.
The charge will apply per MW of requested transmission network capacity and will be payable by new and expanded transmission connected generation, storage, and load applicants (including State-owned Government Trading Enterprises):
- for load customers, this is your Contract Maximum Demand (CMD);
- for generation customers, this is your Declared Sent Out Capacity (DSOC); and
- for storage customers or sites that demand as well as provide network capacity, the charge will be applied to the maximum of the CMD or DSOC, as that is the measure of the network capacity being used.
A 10 MW threshold will apply to new and expanded transmission-connected generation, storage, and load applicants. This threshold ensures that connections that will have a material impact on the requirements of the network are subject to the policy.
Connections and expansions less than 10 MW – such as small businesses and minor upgrades to existing generation facilities and loads – will have a comparatively small impact on the shared transmission network. These applicants will pay capital contributions under the ‘shared assets’ component of Western Power’s current Contributions Policy.
Western Power will develop guidelines to help proponents navigate the Fixed Capital Charge ahead of its commencement on 1 July 2026.
The FCC was informed by industry feedback received as part of the Registration of Interest process conducted by Western Power and Energy Policy WA in 2023. This process surveyed generation, storage, and load.
The details of the Registration of Interest are confidential, but over 65% of respondents indicated a willingness to pay an FCC of $100,000/MW or more and over 86% indicated a willingness to pay $80,000 or more (about 14% did not respond about their willingness to pay).
The value of $100,000/MW was selected because it strikes a balance between providing Western Power and the Government greater revenue certainty, providing proponents greater cost certainty when investing in projects connecting to the SWIS, and will not materially impact the economics of most projects.
Support will be available for network connection and expansion applicants that have made significant progress in the connection process but are facing delays. This will ensure that these applicants will not be adversely impacted by the new policy.
Where Western Power currently forecasts that an access offer will be executed by 30 June 2026, but there is a delay that is outside the applicant’s control, a transition arrangement will apply. In these situations, the applicant will have a three-month window, to 30 September 2026, where they will have the option to pay the capital contribution for shared assets in accordance with Western Power’s current Contributions Policy or the Fixed Capital Charge.
No, this is not a new cost. Proponents of new and expanded transmission connected projects currently pay a capital contribution, and the new policy will simply change how those contributions are calculated and collected.
The Fixed Capital Charge will replace the current capital contribution approach for ‘shared assets’ on the transmission network (works on common-use infrastructure that will be used by multiple network users).
There will be no change to capital contributions for ‘connection assets’ (works on network connection infrastructure that is only used by the connecting proponents), and customers will continue to pay the network tariffs that reviewed and approved by the Economic Regulation Authority (ERA).
The Fixed Capital Charge will be payable upfront, and in-full, at the conclusion of the Planning stage of Western Power’s connection process. This is prior to the commencement of the Execution stage and is consistent with the payment of contributions under the existing process.
An option will exist for the Fixed Capital Charge to be made across two payments. Should proponents opt to take this approach, the second payment will be due 12 months after the initial payment. An interest charge will be applied to the second payment.
Yes. The $100,000 per MW Fixed Capital Charge is real in 2025 dollars and will be indexed annually by the Perth CPI.
The current regulatory framework does not support the scale and pace of transmission expansion that is required to facilitate the renewable energy transition. The costs of these new transmission projects are typically more than any one customer could support. The current capital contribution framework would require customers to either:
Progress individually
If a connection requires a new transmission build or substantial network upgrades, the shared connection costs could be significant, generating a ‘first mover’ penalty, where the first connecting customer would bear most of the shared connection costs and later connecting customers bear less costs.
Attempting to mitigate this by initially pursuing a more limited capacity network build would create ongoing cost inefficiencies, as a series of small upgrades will be costlier than a single upgrade done at scale. Under the current capital contributions approach, calculating costs individually makes it more difficult to ensure there are efficiencies between builds, and that augmentation costs are optimised.
Progress collectively
Progressing several connections at the same time to share the capital costs across multiple projects is an alternative approach. Such an approach currently exists (the Competing Applications Group concept) but has been found to create complexity and would require all transmission connection or expansion applicants to be at an equal stage of readiness throughout the process, which is an unrealistic expectation to place on project developers.
Neither approach is ideal, and risks stalling development of potentially significant new and existing industries.
The Fixed Capital Charge was tested by a Registration of Interest process conducted by Western Power and Energy Policy WA in 2023. The charge has been set at a rate that allows Western Power’s costs to be recovered over time while minimising the impacts on the existing customer base and ensuring that the charge does not inhibit investment in the State.
Only if necessary. To ensure no over-recovery of revenue, the Coordinator of Energy will undertake regular reviews of whether the Fixed Capital Charge is achieving the intended policy objectives.
The Coordinator will make recommendations to the Minister for Energy if there is a need to adjust the amount of the Fixed Capital Charge or the period that it should apply.
The rate may be revised over time to accommodate evolution in the size or timing of the transmission build. It is envisaged that any change to the rate will include a clear notice period.
Any tax associated with the Fixed Capital Charge will be included in the $100,000 per MW value rather than added on.
The transmission investments needed to support the energy transformation will benefit everyone in the long-term. Recent planning studies, for example the SWIS Transmission Plan, have shown the need for a significant expansion of Western Power’s transmission network. This expansion is intended to facilitate the increased need to move energy around the entire SWIS, not focussed in one location or driven by one customer.
The additional transmission is also required to facilitate the connection of new renewable energy generation that will assist the State in meeting its emissions reductions objectives while supporting the closure of coal-fired generation.
Sharing the costs of this expansion across all customers using the network reflects the shared value of the investment.
Existing access agreements and associated charging arrangements will remain valid.
Any material expansions to existing agreements (i.e., greater than 10 MW) after 1 July 2026 will be subject to the Fixed Capital Charge.
Under the existing contributions policy, assets that are used solely by the connecting customer are deemed ‘connection assets’ and are paid in full by the connecting customer. This will not change.
The costs associated with upgrading the transmission backbone are currently determined to be ‘shared assets’. Contributions for shared assets are calculated by taking the forecast costs of works and deducting the amount of new revenue that would be gained from providing covered services to the applicant over a period of up to 15 years.
The shared assets contribution will be replaced by the Fixed Capital Charge for proponents of new and expanded transmission connected generation, storage, and load greater than 10 MW.
The final decision on shared versus connection assets will remain with Western Power.
Western Power will develop more detailed guidance on the approach.
Initially, the Fixed Capital Charge will only apply to transmission customers seeking connection to Western Power’s covered network.
Funding and financing mechanisms for the GRN will be considered as part of future stages of the GRN project.
If another covered network wants to implement a Fixed Capital Charge arrangement, it should advise the Coordinator of Energy who would consider whether this is necessary. The Coordinator would then make a recommendation to the Minister for Energy on whether to apply a Fixed Capital Charge to the covered network.
Generators and retailers are expected to be able to recover the costs of the transmission funding policies from customers through their contractual arrangements and/or through the Wholesale Electricity Market (WEM).
The transmission funding policies will impact the Benchmark Reserve Capacity Price (BRCP). The BRCP is an input in calculating Reserve Capacity Prices and Reserve Capacity Security amounts under the Energy System and Market (ESM) Rules and provides a price signal to market participants for the Reserve Capacity Cycle.
The ERA sets the BRCP annually in accordance with the ESM Rules and the ESM Procedure: Benchmark Reserve Capacity Price. The ERA is expected to account for the Fixed Capital Charge in determining the BRCP.