Proposed amended transmission roll forward model - explanatory statement - August 2010

Transmission network service provider revenue determinations have transitioned to recognising capital expenditure (capex) on a partially as-incurred approach, where the return on capital is calculated based on as-incurred capex and the return of capital (depreciation) is calculated based on as-commissioned capex.

In order to continue with recognising capex under the partially as-incurred approach the AER has amended the transmission roll forward model under clause 6A.6.1(c) of the National Electricity Rules (NER). The AER has also included a function in the roll forward model to calculate closing average remaining asset lives based on a weighted average methodology.