The Australian Energy Regulator (AER) has today released the draft Rate of Return Instrument and explanatory statement for consultation.
A key component of the prices electricity and gas networks charge is the rate of return they recover for their capital investments, which is regulated by the AER.
The draft 2022 Rate of Return Instrument and explanatory statement sets out the approach by which we will estimate the rate of return, comprising the return on debt and equity, and the value of imputation credits.
The draft instrument is largely consistent with the 2018 Instrument with only one substantive change to amend the term of the risk free rate (or term of equity) from 10 to 5 years. A summary of the draft decision, including tables comparing the 2018 Rate of the Return Instrument and this draft decision is set out in the explanatory statement.
Stakeholders will have the opportunity to provide feedback on the draft instrument through written submissions as well a public forum ahead of the independent panel report, and a second public forum after close of submissions.
The final Rate of Return Instrument will be published in December 2022. Once finalised it will bind all regulatory determinations from 2023 for the next four years.
Invitation for submissions
We welcome submissions on the draft Instrument and explanatory statement by 5pm AEST, Friday 2 September 2022.
Written submissions can be sent via email to rateofreturn
aer [dot] gov [dot] au (rateofreturn[at]aer[dot]gov[dot]au) or by mail addressed to:
Mr Warwick Anderson
General Manager
Australian Energy Regulator
GPO Box 3131
Canberra, ACT, 2601
We prefer that all submissions be publicly available to facilitate an informed and transparent consultative process. We will treat submissions as public documents unless otherwise requested. All non-confidential submissions will be placed on the AER's website. For further information regarding the AER's use and disclosure of information provided to it, see the ACCC/AER Information Policy.
We request parties wishing to submit confidential information:
- clearly identify the information that is the subject of the confidentiality claim
- provide a non-confidential version of the submission in a form suitable for publication.