At a glance
A data centre grid connection costs between A$20.5m and A$86.8m to build in Victoria, across nine scenarios the distributors put to the regulator, which accepted 85% as the proponent's share at draft decision.
The same load costs about half as much at 132kV as at 66kV, and a 510 to 750 MVA connection runs A$86.8m against A$37.6m.
The Australian Energy Regulator settled Victorian distribution on 30 April 2026, across five networks and in force since 1 July, making data centres pay their direct connection cost plus "a fair portion of the shared distribution network costs."
The Australian Energy Market Commission published its data centre advice on 5 August and pointed to two rule change requests from Chris Bowen, aimed at the transmission layer those April decisions do not reach.
Victorian residential distribution bills are forecast to fall by A$6 to A$38 a year, on the condition that the forecast demand actually arrives.
Victorian distributors price a data centre connection at A$21m to A$87m
A data centre grid connection in Victoria costs between A$20.5m and A$86.8m to build, and the regulator has accepted 85% as the proponent's share. United Energy and Powercor priced the same nine connection scenarios in the revised proposals they lodged with the Australian Energy Regulator in December 2025. United Energy records the acceptance as coming "in its draft decision".
Two regulators have since ruled at different layers of the grid. The Australian Energy Regulator settled Victorian distribution on 30 April 2026, in final decisions covering five networks and in force since 1 July. The Australian Energy Market Commission published its data centre advice to energy ministers on 5 August and pointed to two rule change requests from Climate Change and Energy Minister Chris Bowen, lodged on 22 July, aimed at the transmission layer the April decisions do not reach.
Behind those scenarios sits real volume. United Energy logged 27 proponent requests worth roughly 1,680MW between November 2024 and October 2025, of which 802MW had reached connection enquiry or offer stage, while Powercor, which put its own pipeline at 2,193MW, commissioned Mandala to test how much of it would arrive and got an expected capacity 45% below the headline.
Connecting at 132kV halves the bill for an identical load
A data centre that connects at 132kV pays roughly half what an identical load pays at 66kV, and the gap holds across the range: A$86.8m against A$37.6m at 510 to 750 MVA, and A$64.1m against A$24.9m at 260 to 500 MVA, a saving of 61%.
Capacity requested (N-1) | At 66kV | At 132kV |
|---|---|---|
Under 260 MVA | A$41.3m | A$24.0m |
260 to 500 MVA | A$64.1m | A$24.9m |
510 to 750 MVA | A$86.8m | A$37.6m |
760 to 1,000 MVA | not priced | A$40.6m |
Source: United Energy and Powercor, Connections: data centre connections, 2026 to 2031 revised proposals to the Australian Energy Regulator, December 2025. Figures in 2026 dollars. Two further scenarios sit outside the grid above: under 140 MVA at 66kV with lines at A$20.5m, and under 100 MVA with an air insulated substation and lines at A$48.6m.
Capacity barely moves the number at 132kV, where every scenario from under 260 MVA to 1,000 MVA lands between A$24.0m and A$40.6m. At 66kV the same span runs from A$41.3m to A$86.8m, climbing steeply with size. A site that takes supply at 132kV sits closer to the transmission system, so less has to be built beneath it, while a site at 66kV needs the distribution network reinforced to reach it and most of the money pays for that reinforcement. The voltage available at a site boundary moves the connection bill further than the capacity on the application form.
AER decisions put a share of network costs on data centres from 1 July
The Australian Energy Regulator published final revenue decisions for five Victorian distributors on 30 April 2026, covering AusNet, Jemena, CitiPower, Powercor and United Energy, and they took effect on 1 July.
AER board member Lynne Gallagher said the decisions "help ensure data centres are paying their own way when connecting to the distribution network," covering "both the direct cost of connection that is only used by the data centre, and a fair portion of the shared distribution network costs." Operators and the Australian government have argued over that shared layer since March. The AER has now allocated it inside Victorian distribution.
The decisions allow AusNet A$4,745.7m, Powercor A$5,335.4m, United Energy A$2,319.2m, CitiPower A$2,039m and Jemena A$2,000m across the five years. The AER expects the distribution component of a Victorian residential bill to fall by A$6 to A$38 a year over that period, because forecast demand growth spreads network costs across more consumption. Whether bills keep falling in the later years, the regulator says, depends on whether that demand growth is realised. Mandala's assessment for Powercor put expected capacity 45% below its pipeline.
Bowen's rule changes target the transmission costs those decisions miss
With distribution settled in one state and no equivalent decision at transmission level anywhere, the two requests Bowen lodged on 22 July are the Australian government's attempt to close the gap.
The first request names four gaps. Rule 5.3AA lets a distributor quote a connection without capturing the transmission augmentation it triggers upstream, and the request wants actual costs recoverable where a forecast is overrun, since "actual costs of projects have far exceeded initial estimates." It also asks that networks be "required to implement specific prudential arrangements, including pre-payment or provision of bank guarantees, for connections above a certain threshold," so a contracted connection that never proceeds leaves no stranded asset for other customers. It would limit how far customer specific assets can be folded into the regulated base. And it would put every connection of 5MW or more on a public register, naming the proponent and the stage of its application.
Nobody has set the megawatt threshold for that security, which leaves a 50MW build and a gigawatt campus on the same side of an undrawn line until somebody does. The commission has initiated neither request, so the next step is a consultation paper with no date attached to it.
The buy side says it already pays, while networks push for more
Frontier Economics, engaged by Amazon Web Services, concluded in a primer on 12 June that capital contributions and the cost revenue test already capture what a connection causes, and that "residential customers should not be meaningfully worse off as a result of data centre connections." Data Centres Australia has drawn the same distinction since March, telling trade title The Energy that operators fund 100% of connection costs and that the unresolved question is the shared network above them. Victoria's April decisions support the first claim inside distribution and leave the second open at transmission.
Transgrid wants the charge to run the other way. Chief executive Brett Redman asked in June for large users to pay for their full contracted capacity whether or not they use it, and put the benefit at up to 15% off transmission costs for consumers. Nexa Advisory chief executive Stephanie Bashir warned that the same rule lets a monopoly shift unchecked costs onto connecting customers, and cautioned against networks overcharging or gold plating the network. Australia's networks are regulated monopolies, and the customer carrying a bigger share of the bill also carries more of the risk if a network overbuilds.
What to watch
These are Victorian distribution figures, drawn from a reset cycle that New South Wales distributors do not share and have published nothing comparable against, and the largest campuses connect at transmission voltage, where Victoria's April decisions do not reach. These numbers describe Victorian distribution rather than a national schedule, and the transmission layer is where Bowen's requests are aimed.
A public register of every connection at 5MW or more, naming the proponent and the stage reached, would show which of the 9GW in AEMO's queue and the 5.4GW in its transmission pipeline is real, without anyone having to define a speculative application. CDC has already pressed for the queue to be cleared of speculative applications, and the AER's forecast of falling Victorian bills depends on how much of that queue arrives.
Allens partner Danielle Jones, writing on LinkedIn, expects the package to make co-located renewable generation and battery storage more attractive to developers. Generation on site reduces the upstream augmentation a connection triggers, and so reduces the security the customer has to lodge. The rule changes on offsets and market registration go to energy ministers in September, following their 28 July agreement on in-jurisdiction renewables, and the final determination on technical access standards for large inverter based loads is due in late October.