AER - Explanatory Note - Review of replacement expenditure modelling assumptions - 6 December 2019

On 6 December 2019 we released an Explanatory Note explaining our review of a set of replacement expenditure (repex) modelling assumptions.

The objective of this review was to continue refining the AER's repex model. In addition, our aim is to help the industry understand the model, including how it is applied during distribution determinations.

We expect that more informed users of the repex model will mean more certainty about the likely repex modelling outcomes and more consistent treatment of repex data, promoting regulatory certainty.

This Explanatory Note considers the issues raised by stakeholders in their submissions during the consultation process and outlines our positions on these set of modelling assumptions.

The consultation process highlighted the need for clarification around certain assumptions. This clarification has been provided in an Explanatory Note released today. We intend 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.