On Thursday, 9 December 2021, the AER published the final working paper on Overall rate of return, equity and debt, the last in our Rate of Return Instrument 2022 series.

This paper draws together the key topics on the overall rate of return, equity and debt. In particular, the paper sets out our proposed positions on the following five priority issues:

• estimation of the market risk premium
• use of the energy infrastructure credit spread index
• weighted trailing average return on debt
• equity beta
• use of cross checks to sense check the overall rate of return.

The working paper will assist us to set a rate of return that contributes to the achievement of the National Electricity Objective and the National Gas Objective to promote efficient investment and efficient operation of energy services in the long-term interest of consumers.

Our next steps include publishing an information paper and call for submissions, which outlines our proposed position on various issues highlighted in all of our working papers.

This will be followed by the concurrent expert sessions in February 2022, as part of our Rate of Return Instrument 2022 process.