The AER has published a new version of the roll forward model (RFM) that applies to future electricity transmission determinations. The main change is that the new RFM allows the continuation of the partially as-incurred approach to recognising capital expenditure. The RFM also provides an option for selecting a forecast or actual depreciation approach to be used to roll forward the RAB, and give effect to the AER’s Rate of return guideline, allowing for an annual update for the return on debt.
The National Electricity Rules (NER) requires that the AER develop and publish certain guidelines, models and schemes that will be applied to transmission networks service providers. On 23 October 2015, in accordance with clause 6A.6.1(c) of the NER, the AER published:
- An amended transmission RFM (version 3) and associated handbook.
- A final decision document and associated log of detailed changes to the RFM.