The AER is required to determine the revenue allowance for Powerlink under the National Electricity Rules. The first step in developing the revenue allowance for the next regulatory control period is to develop a Framework & Approach (F&A) paper for Powerlink. The F&A sets out which incentive schemes are to apply to Powerlink and our approach to expenditure forecasting and depreciation for the next regulatory control period, which will commence in 2017. We have published our final decision on the F&A and it is available for download.
Powerlink has advised the AER of its intention to use a 'top-down' forecasting methodology for some of its capital requirements in the next regulatory control period. The AER's Expenditure Forecast Assessment Guideline includes scope to use top-down forecasting techniques. Our decision notes the Powerlink proposal but cautions that it will remain Powerlink's responsibility to adequately explain and justify their overall revenue proposal.