AER review of the weighted average cost of capital – Issues paper
The Australian Energy Regulator has today released its issues paper as part of its review of the weighted average cost of capital (WACC) parameters for electricity transmission and distribution networks.
The National Electricity Rules (NER) provides that the AER may review the WACC parameters to be adopted in determinations by electricity transmission and distribution network service providers at five-year intervals. However, the AER expects its findings will also be of relevance to its consideration of gas businesses access arrangements, at least in providing a reference point for further consideration.
"This review of WACC parameters will be important in setting the rate of return for regulated electricity assets going forward and will be a key element of the future regulatory framework. The release of the issues paper forms the first stage of this comprehensive review process," AER Chairman Mr Steve Edwell said.
"The issues paper is intended to focus stakeholder comment on the matters considered to be relevant to the AER's review and the stakeholder submissions will be important in informing the AER's draft and final decisions on the WACC. The issues paper will provide stakeholders with an opportunity to raise issues and provide views early in the process," Mr Edwell said.
Interested parties are invited to make written submissions to the AER on the issues discussed in the issues paper by the close of business Wednesday, 17 September 2008. The issues paper will be available on the AER's website, www.aer.gov.au.
The AER intends to release its draft or proposed positions on the WACC by December 2008 and to finalise its views by March 2009 as required under the NER. Any enquiries about this issues paper, or about lodging submissions, should be directed to the AER's Network Regulation South Branch on (03) 9290 1444 or at AERinquiry@aer.gov.au