AER releases new electricity roll forward models

The AER has published new versions of the roll forward models (RFMs) that apply to future electricity distribution and transmission determinations. The new versions give effect to the changes to tax depreciation set out in AER’s final report on the review of the regulatory tax approach. The main changes are that the new RFMs allow for the recognition of immediate expensing of certain capex for tax purposes and applies the diminishing value method for tax depreciation to new depreciable assets.

The RFMs also now include a default approach to year-by-year depreciation tracking and other minor changes.

The National Electricity Rules (NER) provide that the AER may amend or replace its models that will be applied to distribution and transmission networks service providers. On 7 April 2020, in accordance with clauses 6.5.1(c) and 6A.6.1(c) of the NER, the AER published:

  • An amended transmission RFM (version 4) and associated handbook.
  • An amended distribution RFM (version 3) and associated handbook.
  • A final decision document and associated log of detailed changes to the RFMs.
Issued date: 
7 April 2020
AER reference: 
AC 38/20
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