Under national energy laws, the AER must make a Rate of Return Instrument (RORI) every 4 years. The existing 2022 RORI was made in February 2023.
In July 2025, we will start a review to make the 2026 RORI by December 2026. Building on our extensive knowledge and learnings from previous RORI reviews, we expect the upcoming review will be a more efficient and effective process that is less onerous for all interested parties.
As a first step, today we have published a paper for the information of stakeholders that sets out the review process we will follow to make the 2026 RORI.
The estimate of the rate of return is important for promoting efficient prices in the long term interests of consumers. The RORI specifies how the AER will determine the allowed rate of return on capital invested in regulated electricity and gas networks. It is binding on network businesses and the AER. The return on capital is a key driver of the total amount of revenue network businesses derive from network revenue determinations made by the AER. We calculate the return on capital by multiplying the rate of return to the value of the regulatory asset base.