The AER advises regulated entities that the 2022 Rate of Return Instrument will no longer utilise Reserve Bank of Australia (RBA) F3 data to calculate return on debt. The RBA is no longer publishing Spread to Swap or Spread to Australian Government Securities data in its F3 Statistical Table, effective from 14 November 2023. The RBA statement is available here.
Under the 2022 Rate of Return Instrument, the AER has previously utilised RBA F3 data, along with Bloomberg and Refinitiv, as an input into the return on debt calculations that ultimately inform determinations on allowed revenues and pricing for regulated energy networks.
Given the unavailability of this specific RBA yield curve input going forward, the AER will be enacting the contingency mechanism of the Instrument. Namely, we will rely solely on yield curve data published by Bloomberg and Refinitiv to derive the return on debt values embedded in regulatory rate of return calculations.