Victoria to NSW Interconnector West (VNI West)

Overview 

The Victoria to NSW Interconnector West, known as VNI West, is a proposed new 500 kilovolt (kV) double circuit overhead transmission line connecting the high voltage electricity grids in New South Wales and Victoria.

VNI West will connect the EnergyConnect transmission line in New South Wales with the Western Renewables Link transmission line in Victoria, crossing the Murray River north of Kerang. The preferred option runs from Transgrid’s substation in Dinawan north of Jerilderie in New South Wales, to new substations proposed near Kerang and Bulgana in Victoria. 

Best Hooper Lawyers is a Victorian-based law firm which regularly assists landowners impacted by major infrastructure projects to negotiate appropriate compensation for the loss of land, including by compulsory acquisition. 

This article relates to the Victorian component of the VNI West Project (Project) and details a landowner’s right and entitlement to negotiate appropriate compensation.

The Victorian component is approximately 240 kilometres in length. The transmission towers are expected to be 60 to 80 metres in height, located 400 metres apart. The footings for the towers are expected to be approximately 15 to 20 square metres. The buffer around the base of the tower is expected to be 5 metres and will not be fenced.

 

AEMO Victorian Planning and Transgrid (the New South Wales transmission planner) are completing the early planning and regulatory investment process for the Project. 

Transmission Company Victoria was established by AEMO Victorian Planning to progress planning and early works for the Victorian component of VNI West. It is expected that the agreements entered into by Transmission Company Victoria will be transferred to a transmission provider who will ultimately be selected to carry out the Project. Construction is expected to commence in the second half of 2026 and be completed in 2030.

A draft transmission corridor of approximately 2 kilometres wide was identified and announced in October 2023. The final alignment is expected to be determined by late 2025.  The VNI West easement is expected to be approximately 70 – 120 metres wide, however there could be some variation to this through the route refinement process. The easements, to be recorded over the affected land impacted by the transmission lines, will allow for the planning, construction and maintenance of the VNI West towers and lines. You can view an interactive map of the proposed VNI West area of interest corridor here. 

Whilst the VNI West is in its planning and approvals phase, landowners likely to be affected by the transmission alignment will soon receive contact from Transmission Company Victoria relating to the acquisition of an easement over their land.

Below is a concise summary of the steps Transmission Company Victoria must follow to obtain an easement across someone’s property for VNI West. It also outlines the rights of the landowner regarding compensation for the easement, whether acquired through mutual agreement or compulsory means.

If your property is potentially impacted by VNI West, you are encouraged to reach out to Sebastian Greenway, the Principal Lawyer and leader of the Compulsory Acquisition Practice Group at Best Hooper, or Jonathan Hourigan, a Senior Associate in Best Hooper’s Compulsory Acquisitions Team, for guidance and assistance.

Environmental and Planning Approvals

Transmission Company Victoria lodged a referral with the Victorian Minister for Planning in December 2023 under the Environment Effects Act 1978 (Vic) to determine whether an Environment Effects Statement (EES) must be prepared for the Victorian component of the Project. The Minister for Planning has not yet made a decision in this regard. The EES referral can be viewed here. 

The purpose of the EES is to ensure the Project is designed, constructed and operated to minimise adverse environmental impacts. It gives decision-makers (such as Ministers and statutory authorities) the information they need to determine whether statutory approvals should be granted and what conditions should apply.

It is anticipated that an EES will be required to be prepared for VNI West due to the extent of expected environmental impacts outlined in the EES referral. Once the EES has been prepared, the EES will be publicly exhibited for at least 30 days for public comment.  

Other statutory approvals may also be concurrently exhibited with the EES, such as a draft Planning Scheme Amendment pursuant to the Planning and Environment Act 1987 (Vic) which makes changes to the four affected planning schemes (Northern Grampians, Buloke, Loddon and Gannawarra) so as to facilitate the Project. It is anticipated that the draft Planning Scheme Amendment would apply a Specific Control Overlay to the land affected by the Project and insert an Incorporated Document into the four planning schemes. Following public exhibition, an independent Inquiry and Advisory Committee is expected to be appointed by the Minister for Planning. The Inquiry and Advisory Committee would convene a public hearing to consider submissions and evidence in respect of the EES and draft Planning Scheme Amendment. 

Transmission Company Victoria access to private land to undertake due diligence

Prior to constructing and operating the Project, Transmission Company Victoria will require access to private land to conduct its due diligence investigations. 

Transmission Company Victoria’s due diligence investigations include inspections relating to the market value assessment of the easement which is to be acquired, together with surveys on geotechnical, ecological and aboriginal and non-aboriginal cultural heritage, landscape and visual amenity, surface and groundwater surveys to determine the alignment of the Project.

Transmission Company Victoria has published The Landholder Guide: Land access, easements and compensation (Transmission Company Victoria Landholder Guide) (November 2023) which contains information about land access, easements and compensation for landholders affected by the Project.

Importantly, Transmission Company Victoria cannot access private land without the consent of the landowner. Landowners who provide consent to Transmission Company Victoria’s to enter upon their land and undertake due diligence investigations may be entitled to the payment of a ‘landholder participation fee’ of up to $10,000 per property.  

There may be circumstances where agreement on accessing land cannot be reached. Where such a voluntary agreement cannot be reached, an ‘electricity corporation’ may be able to access land for specific purposes and undertake certain works and other activities on land, under section 93 of the Electricity Industry Act 2000 (Vic) (EI Act). An ‘electricity corporation’ for the purposes of the EI Act is an entity that holds a licence granted under the EI Act to generate, transmit or distribute electricity. 

At the time of publication of this article, Transmission Company Victoria is not an ‘electricity corporation’ under the EI Act and cannot access land using the powers outlined in section 93. In the future, Transmission Company Victoria may become an ‘electricity corporation’ for the purposes of the EI Act. If that occurs, Transmission Company Victoria may seek to rely upon these legislative powers to obtain access to privately owned land.

Option Agreement for easement

Once Transmission Company Victoria has completed its preliminary due diligence investigations and is satisfied that a property is required for the Project’s alignment, Transmission Company Victoria will seek to reach agreement with the landowner for the acquisition of that easement.

This Agreement will take the form of an Option Deed, ‘Option for Easement Agreement (Option Agreement)’ which is an agreement with you for the future grant of an electricity easement over the land, once all planning approvals are obtained by Transmission Company Victoria for the Project. This Deed will identify the part of the land over which an easement will be created, and will set out the terms and commercial arrangements regarding the acquisition of the easement and the payment of compensation and costs associated with the acquisition. 

In consideration of entering into the Option Deed, Transmission Company Victoria will agree to pay landowners an Option Fee. 

This Option Deed will also include the proposed easement terms and conditions which are to be permanently granted over the land.

Given that these easement terms will dictate the future use and occupation of not only the easement land, but the balance of the land, it is important to obtain legal advice to understand the impacts to your property.  We understand that each landowner has different objectives and site-specific requirements that should be considered as part of the negotiation of the Option Deed. These may include the parties’ responsibilities and liabilities in respect of:

• timing and notification for access;
• stock and fencing requirements;
• interference with natural resources;
• biosecurity and pest control; and
• the extent of make good and rehabilitation obligations. 

The easement terms that will be prepared by Transmission Company Victoria are expected to allow the following activities to occur within the easement:

• cropping, grazing, market gardens and orchards;
• the use and operation of the most farming equipment, including heavy machinery such as headers of up to 5 metres in height;
• machinery at a height of between 5 and 8.6 metres, subject to a safety assessment; and
• centre pivot and lateral moving irrigators, subject to a safety assessment (gun irrigators are expected to be prohibited).

The full extent of the impact of the final agreed easement terms on a particular parcel of land will depend on your circumstances and the current use of the land. Accordingly, it is important to ensure that you are properly advised from the outset to ensure that your continued and intended use of your land is not impacted.

Easement compensation

Compensation is payable to landowners where an easement is acquired over their land. Other parties holding an interest in the land on which the easement is located, who suffer loss due to the establishment of the easement or construction activity, may also be considered as part of the compensation process.

The Option Deed will include the compensation amount that Transmission Company Victoria proposes to pay for the grant of the easement. It is essential that landowners obtain independent expert valuation advice to assess the appropriate sum of money payable for the easement. The valuation should not merely have regard to the land which is to be burdened by the easement, but also, the diminution in value to the balance of the land as a consequence of the Project.

Recovery of legal costs under a volunatary agreement

Transmission Company Victoria, under the Transmission Company Victoria Landholder Guide, advises landowners that it will pay $10,000 (excluding GST) for a landowner’s legal costs associated with reviewing and negotiating the Option Deed. The payment of the $10,000 is not dependent on a landowner signing the Option Deed. 

Transmission Company Victoria may agree to reimburse further reasonable legal costs and professional service provider fees that exceed the initial $10,000 amount. 

Victorian Government payment

On 24 February 2023, the Victorian Government announced additional payments for landowners where new transmission easements are acquired over their property. These payments are in addition to the compensation and payments outlined above. The payments are intended to recognise the role that private landowners play to host transmission infrastructure on their property. Whilst the legislation is not yet finalised, it is currently intended that for a standard transmission easement area, which include the easements to be acquired for VNI West, the payment rate is anticipated to be $8,000 per year, per kilometre of new transmission easement, for a period of 25 years. This amount is expected be indexed for CPI annually. Further information surrounding  this landowner payment will be available upon the commencement of new legislation.

Compulsory Acquisition

If agreement cannot be reached and an Option Deed is not executed by the parties, Transmission Company Victoria may seek approval from the Governor in Council to compulsorily acquire the easement over the land, in accordance with the EI Act. If this were to occur, Transmission Company Victoria would be required to adhere to the statutory procedures and requirements under the Land Acquisition and Compensation Act 1986 (Vic) (LAC Act) to acquire the easement and pay the landowner compensation. 

It is noted that at the time of writing this article, Transmission Company Victoria does not currently hold a transmission licence under the EI Act and does not currently have power to compulsorily acquire an easement. In order for Transmission Company Victoria (or any subsequent entity that will have been novated the benefit of the Project) to have power to compulsorily acquire an easement under section 86, Transmission Company Victoria must first be the holder of an electricity transmission licence issued under the EI Act and obtain the approval of the Governor in Council. 

The key differences under the compulsory acquisition process is that no prior agreement needs to be reached with a landowner regarding the size, type and nature of the easement to be acquired, and Transmission Company Victoria may have the acquired easement recorded over the property’s title without the landowner’s consent. 

Should this process occur, the landowner would not be entitled to receive payment of the Option Fee, however, the landowner would be entitled to recover compensation under the numerous heads of compensation available under the LAC Act. These heads of compensation are similar to the compensation and costs that Transmission Company Victoria was willing to pay by agreement as set out under the Transmission Company Victoria Landholder Guide– i.e. market value of the easement, disturbance costs and professional and legal costs. 

However, each case is different, and it is important landowners obtain expert legal advice in respect of their rights and entitlements to compensation in their negotiations with Transmission Company Victoria.

The Best Hooper value

It is essential that you receive independent, expert legal advice before entering any discussions with Transmission Company Victoria.

Best Hooper Lawyers can guide you through the acquisition process, whether by agreement or compulsory process, from both a legal and strategic perspective, including seeking advice from property and valuation experts, to assist in valuation and strategic planning as required.  Best Hooper can also assist landowners in the EES Inquiry and Advisory Committee process in relation to the easement alignment and potential environmental impacts of the Project.

We have a broad range of experience across public infrastructure projects and understand the stages involved in these large scale projects that may affect a person and their proprietary interest in land. 

We have recently assisted landowners affected by the following major infrastructure projects:

• Western Renewables Link
• Suburban Rail Loop Project;
• Melbourne Airport Rail Project;
• APA’s Western Outer Ring Main (WORM) Pipeline;
• North East Link Project;
• West Gate Tunnel Project; and
• Melbourne Metro Rail Project.

We would be pleased to assist in providing advice and representation to any person affected by VNI West.  Please note, we do not act for acquiring authorities or government bodies in the acquisition of land.