Explanatory Statement - Modified Rate of Return Instrument - Six month extension period for Vic Gas DNSPs - October 2021

The Victorian Government has determined to move the access arrangement periods of the state's gas distribution businesses from a calendar year access arrangement period to a financial year basis. This change means all full access arrangements for gas distribution businesses the AER regulates will have financial year based regulatory years.

This means the next access arrangement period for the Victorian gas distribution businesses will commence on 1 July 2023. The Order in Council made by the Victorian Minister under section 64 of the National Gas (Victoria) Act 2008 (Vic) that was published in the Victorian Government Gazette G39 30 September 2021 (Order), amends the revision commencement date for the 2018-2022 access arrangements to 1 July 2023. The Order also provides that the six month period of 1 January 2023 to 30 June 2023 is taken to be an extra regulatory year of the 2018-2022 access arrangements (applicable access arrangement extension period).

The Order declares that the 2018 Rate of Return Instrument applies to the applicable access arrangement extension period for each of the 2018–2022 access arrangements. The Order also provides that, for the purposes of giving effect to the change of the access arrangement period from the calendar to financial year basis, the AER may modify the application of the 2018 Instrument to the applicable access arrangement extension period. The Order requires the AER to publish any such modification.

In accordance with the Order the AER has made a modified rate of return instrument that applies to the applicable access arrangement extension period of 1 Jan 2023 to 30 June 2023. This is published below along with an explanatory statement to this modified rate of return instrument.