Replacement expenditure modelling assumptions review and Explanatory Note

In August this year the AER commenced a consultation process on a set of repex modelling assumptions. The objective of the consultation was to refine the AER's repex model and to help the industry understand the AER's repex model, including how it is applied during distribution determinations.

The AER has now finalised this consultation process. Overall, the consultation found that stakeholders viewed the AER’s current approach appropriate. The AER’s use of discretion and judgement, particularly in assessing some specific aspects of the model on a case-by-case basis, was generally supported as distributors and their operating environments are not always comparable.  

The consultation process highlighted the need for clarification around certain assumptions. This clarification has been provided in an explanatory note released today. The AER also intends to provide more detail about certain assumptions in upcoming determinations.

The explanatory note also highlights our intention to undertake a RIN review in the future to address data discrepancies and how these are reported.

Sector: 
Segment: 
Issued date: 
6 December 2019
AER reference: 
AC 183/19
Contact: 
AER General Inquiries AERInquiry@aer.gov.au