On 4 November 2019 the AER released a consultation paper that proposed a pathway to the 2022 rate of return instrument, together with a report by The Brattle Group summarising stakeholder feedback on the process used to set the 2018 rate of return instrument.

The consultation paper:

• Has an explicit focus on the decision making process, not the content of the instrument.
• Provides a high-level outline of the decision making stages and our proposed timelines for them.
• Outlines high-level roles for various entities involved in the consultation and review process.
• Describes key elements of the process to the 2022 review and the high-level purpose for each.

We invited stakeholder feedback on the consultation paper. This process also allowed comments in response to the December 2019 annual update. The period for submissions has now closed.

On 29 May 2020 the AER released a position paper that set out a pathway to the 2022 rate of return instrument.

The position paper:

• Has an explicit focus on the decision making process, not the content of the instrument.
• Highlights and explains changes made from the 2018 review process.
• Provides a high-level outline and timeline for decision making stages.

On 21 May 2021 the AER released a position paper on Rate of return and assessing the long term interests of consumers.

This paper sets out our views around what the National Electricity Objective (NEO) and National Gas Objectives (NGO) mean in the context of setting the expected rate of return. In particular, we discuss how the concept of the long term interests of consumers, mentioned in the NEO and NGO, features in setting the expected rate of return.

In forming our position, we took into account the views expressed on this topic by the Consumer Reference Group (CRG) and Energy Networks Australia (ENA).

This paper is another in a series of position and working papers on specific rate of return topics that we are publishing as part of our pathway to the 2022 Rate of Return Instrument.

Our pathway to 2022 includes a series of working papers in advance of the main phase of the review. These working papers explore key elements of the rate of return and lay a foundation for the development of the 2022 instrument. Each working paper has its own project page on the AER website.

The working papers we published in 2020 were:

• Energy network debt data – debt term and extension of debt index
• CAPM and alternative return on equity models
• International regulatory approaches to rate of return

In March 2021 we released a position paper which laid out the schedule of working papers throughout 2021. These are divided into two categories, in-depth and broad working papers.

In-depth working paper topics:

• Rate of return and cashflows in a low interest rate environment
• Term of rate of return

Broad working papers:

• Debt
• Equity
• Overall rate of return (including gamma and gearing)

The position paper below details consultation schedules throughout the year and how stakeholders can respond to the papers and so shape the 2022 rate of return instrument.

On 10 June 2021, the AER released a consultation paper that calls for submissions on two key aspects of the 2022 Rate of Return Instrument process – the Concurrent Evidence Sessions and the Independent Panel.

The consultation paper:

• Identifies what is required of us under legislation
• Indicates those matters for which we have already made a decision
• Sets out our initial position on a number of issues where comment is sought.

We invited stakeholder feedback on the consultation paper. Submissions closed on 9 July 2021.

We received one submission after the closing date.

On the 27 August 2021 we published our position paper on the Pathway to 2022 process, focusing on the Independent Panel and Concurrent Evidence Sessions.

The position paper is also accompanied by two calls for nominations, one for Independent Panel members and one for Concurrent Evidence Session experts. We have provided further information to explain what we would consider key aspects of suitability for both roles, as well as guidance on conflicts of interest and timeframes of work schedules. Nominations close 17 September 2021.

Nominations for Independent Panel members and Concurrent Evidence Session experts closed on Friday 17 September 2021.