Better regulation
On 10 December 2012, the AER released a Better regulation issues paper with more information on the guidelines and our plans for the consultation processes for each work stream.
Stakeholder forum
Better regulation work program and the consultation process
On 18 December 2012, the AER held a video conference forum to discuss our Better regulation work program and the consultation process that we are planning.
AER Agenda - Better regulation stakeholder forum - 18 December 2012 View details
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Better Regulation AER public forum - Andrew Reeves presentation - 18 December 2012 View details
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Better regulation AER public forum presentation notes - 18 December 2012 View details
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Issues paper
Rate of return guidelines
On 18 December 2012, the AER released its issues paper on the rate of return guidelines.
AER Issues paper - Rate of return guidelines - 18 December 2012
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Stakeholder forum
Rate of return guidelines
On 5 February 2013 the AER hosted its first forum on the rate of return guidelines .
AER agenda - Rate of return guidelines - Forum No. 1 - 5 February 2013
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AER Rate of return forum - Attendees list - 5 February 2013
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AER forum summary - Rate of return guidelines - Forum No. 1 - 5 February 2013
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Submissions
Submissions to the AER's rate of return guidelines issues paper closed 15 February 2013.
QTC submission - Rate of return guidelines issues paper - 15 February 2013
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Ergon Energy - Submission cover letter to rate of return guidelines issues paper - 15 February 2013
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Ergon Energy submission - Rate of return guidelines issues paper- 15 February 2013
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ActewAGL submission - Rate of return guidelines issues paper- 15 February 2013
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CitiPower, Powercor & SA Power Networks submission - Rate of return guidelines issues paper - 15 February 2013
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Energex submission - Rate of return guidelines issues paper - 15 February 2013
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Grattan Institute submission - Rate of return guidelines issues paper - 15 February 2013
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EUAA submission - Rate of return guidelines issues paper - 15 February 2013
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Jemena submission (cover letter) - Rate of return guidelines issues paper - 15 February 2013
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Jemena submission - Rate of return guidelines issues paper - 15 February 2013
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Envestra submission - Rate of return guidelines issues paper - 15 February 2013
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Major Energy Users submission - Rate of return guidelines issues paper - 17 February 2013
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ENA submission - Rate of return guidelines issues paper - 18 February 2013
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SP AusNet submission - Rate of return guidelines issues paper - 18 February 2013
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NSW DNSP submission - Rate of return guidelines issues paper - 18 February 2013
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NSW DNSP submission (attachment) - Rate of return guidelines issues paper - 18 February 2013
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United Energy and Multinet Gas submission - Rate of return guidelines issues paper - 19 February 2013
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PIAC submission - Rate of return guidelines issues paper - 19 February 2013
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APIA submission - Rate of return guidelines issues paper - 20 February 2013
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UnitingCare Australia submission - Rate of return guidelines issues paper - 7 March 2013
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Stakeholder forum
Subgroups 1 & 2, workshop no. 1
On 25 and 26 February 2013, the AER held two workshops with stakeholders on rate of return matters pertaining to the cost of equity and the cost of debt. To assist organisations or individuals who did not attend the meetings, we have attached a high level summary of the discussions held, and separately the actions items that followed.
AER forum agenda - Rate of return guidelines - 25 and 26 February 2013
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AER forum summary - Rate of return guidelines - Subgroup No. 1, workshop No. 1 - 25 February 2013
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AER forum summary - Rate of return guidelines - Subgroup No. 2, workshop No. 1 - 26 February 2013
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AER forum summary - Rate of return guidelines - Action items from workshops - 25 and 26 February 2013
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AER presentation on financeability credit metrics - Rate of return guidelines - 25 February 2013
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AER forum summary - Rate of return guidelines - Summary of return on debt methodologies - March 2013
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Project administration
Revised target date for rate of return consultation paper
We had originally planned for the next step to be the publication of a consultation paper at the end of March. However, we have now formed the view that a better approach would be to revise the target date to the end of April to enable us to progress some agreed action items from the workshop. This includes additional discussions with our stakeholders on the principles that should underpin the rate of return guidelines.
The revised target date will enable us to have full regard to the extensive material we have received, in addition to the extra consultation we are now planning, prior to publishing our next consultation paper.
This revision does not affect the publication of the draft guideline that will still occur on 9 August 2013.
Consultation paper
Rate of return guidelines
On 10 May 2013, the AER released the consultation paper on Rate of return guidelines for consultation as a part of the Better Regulation reform program 2013.
The Rate of return guidelines will set out how we intend to apply the new rules framework to set rates of return for network business that meet the long term interest of consumers. This will involve setting out high level regulatory criteria that will guide our assessment of methodologies, financial models, market data and other evidence to determine returns on equity and debt that make up the overall rate of return.
Submissions
Submissions to the AER's rate of return consultation paper closed 21 June 2013
ActewAGL submission - Rate of return guidelines consultation paper - 21 June 2013
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APA Group submission - Rate of return guidelines consultation paper - 21 June 2013
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APIA submission - Rate of return guidelines consultation paper - 21 June 2013
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EUAA submission - Rate of return guidelines consultation paper - 21 June 2013
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Jemena submission (cover letter) - Rate of return guidelines consultation paper - 21 June 2013
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Jemena submission - Rate of return guidelines consultation paper - 21 June 2013
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MEU submission - Rate of return guidelines consultation paper - 21 June 2013
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NSW DNSP submission - Rate of return guidelines consultation paper - 21 June 2013
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PIAC submission - Rate of return guidelines consultation paper - 21 June 2013
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QTC submission - Rate of return guidelines consultation paper - 21 June 2013
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RARE Infrastructure submission - Rate of return guidelines consultation paper - 14 June 2013
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SP AusNet submission - Rate of return guidelines consultation paper - 21 June 2013
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Late submissions
Rate of return consultation paper
In consideration of the length of the ENA’s submission on our rate of return consultation paper, and delay in receiving it, we requested the ENA to provide a concise consumer-friendly summary of their submission.
Envestra submission - rate of return guidelines consultation paper - 28 June 2013
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ENA Submission - Summary of issues - Rate of return guidelines consultation paper - July 2013
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ENA submission - Rate of return guidelines consultation paper - 28 June 2013
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ENA submission - Rate of return guidelines consultation paper - Attachment 1 - Review of cost of equity models - June 2013
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ENA submission - Rate of return guidelines consultation paper - Attachment 2 - Estimates of the Black CAPM zero beta premium - June 2013
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ENA submission - Rate of return guidelines consultation paper - Attachment 3 - Dividend discount model estimates of the cost of equity - June 2013
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ENA submission - Rate of return guidelines consultation paper - Attachment 4 - Evidence on the required return on equity from independent expert reports - June 2013
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ENA submission - Rate of return guidelines consultation paper - Attachment 5 - Estimating the return on the market - June 2013
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ENA submission - Rate of return guidelines consultation paper - Attachment 6 - Estimating expected return on the market in the context of regulatory debate - June 2013
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ENA submission - Rate of return guidelines consultation paper - Attachment 7 - Regression-based estimates of risk parameters for the benchmark firm - June 2013
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ENA submission - Rate of return guidelines consultation paper - Attachment 8 - The Vasicek adjustment to beta estimates in the CAPM - June 2013
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ENA submission - Rate of return guidelines consultation paper - Attachment 9 - Information on equity beta from US companies - June 2013
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ENA submission - Rate of return guidelines consultation paper - Attachment 10 - Comparision of OLS and LAD regression techniques for estimating beta - June 2013
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ENA submission - Rate of return guidelines consultation paper - Attachment 11 - The payout ratio - June 2013
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ENA submission - Rate of return guidelines consultation paper - Attachment 12 - The payout ratio - June 2013
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ENA submission - Rate of return guidelines consultation paper - Attachment 13 - Dividend drop-off estimate of theta - June 2013
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ENA submission - Rate of return guidelines consultation paper - Attachment 14 - Term of the risk free rate for the cost of equity - June 2013
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ENA submission - Rate of return guidelines consultation paper - Attachment 15 - The market, size and value premiums - June 2013
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ENA submission - Rate of return guidelines consultation paper - Attachment 16 - Credit ratings for NSPs - June 2013
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ENA submission - Rate of return guidelines consultation paper - Attachment 17 - Debt strategies of utility businesses - June 2013
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ENA submission - Rate of return guidelines consultation paper - Attachment 18 - Estimating the debt risk premium - June 2013
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ENA submission - Rate of return guidelines consultation paper - Attachment 19 - Debt financing costs - June 2013
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ENA submission - Rate of return guidelines consultation paper - Attachment 20 - Benchmark term of debt - June 2013
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ENA submission - Rate of return guidelines consultation paper - Attachment 21 - Potential impact of ERA's DRP methodology - June 2013
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FIG submission (cover letter DUET Group ) - Rate of return guidelines consultation paper - 24 June 2013
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FIG submission - Rate of return guidelines consultation paper - 24 June 2013
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TransGrid submission - rate of return guidelines consultation paper - 27 June 2013
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Citipower, Powercor, SA Power Networks submission - rate of return guidelines consultation paper - 28 June 2013
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COSBOA submission - Rate of return guidelines consultation paper - 5 July 2013
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