AER publishes papers relating to the Rate of Return Instrument 2022

The Australian Energy Regulator (AER) has today released three papers in a series of position and working papers on specific rate of return topics.  

The position paper and two draft working papers form part of our pathway to the 2022 rate of return instrument. Our draft working papers on the Term of the rate of return and the Rate of return and cashflows in a low interest rate environment invite stakeholder submissions on these topics.

The position paper, Rate of return and assessing the long term interests of consumers, sets out our views around what the National Electricity Objective (NEO) and National Gas Objective (NGO) mean in the context of setting the expected rate of return. In particular, we discuss how the concept of the long term interests of consumers, mentioned in the NEO and NGO, features in setting the expected rate of return.

In forming our position, we took into account the views expressed on this topic by the Consumer Reference Group and Energy Networks Australia.

The Term of the rate of return paper analyses the evidence currently available, considers the issue of a suitable term for the rate of return and outlines the AER’s preliminary thinking on the term for the rate of return. The Rate of return and cashflows in a low interest rate environment paper begins our consideration of the consequences of lower interest rates and whether we need to adjust our approach.

The outcomes from these working papers will contribute to our 2022 rate of return instrument review. This information will assist us to set a rate of return that contributes to the achievement of the NEO and NGO.

Public forum

There will be separate public online forums for the two draft working papers during the consultation period which finishes on 2 July 2021; the date of these forums will be published soon. Interested stakeholders should email and register to attend, you will be contacted with details on how to participate.

Invitation for submissions

Written submissions should be emailed to by close of business 2 July 2021.

Alternatively, submissions can be posted to:

Mr Warwick Anderson
General Manager, Network Finance and Reporting
Australian Energy Regulator
GPO Box 3131
Canberra ACT 2601

We prefer that all submissions be sent in an electronic format in Microsoft Word or other text-readable document form and publicly available, to facilitate an informed, transparent and robust consultation 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.

Enquiries about this paper, or about lodging submissions, should be directed to the Network Finance and Reporting branch (03) 9290 1800.

Issued date: 
21 May 2021
AER reference: 
AC 71/21
General enquiries - Rate of return