We have commenced a consultation process to identify profitability measures for regulated electricity and gas network businesses and the data required to calculate these measures.
We plan to begin collecting this data from electricity and gas network businesses as part of our annual regulatory reporting processes. We will publish this information and use it to report on profitability in electricity and gas network performance reports. In addition to measuring the actual profitability of a regulated entity, the measures should also allow comparison of forecast returns against actual returns, comparison of regulated businesses against each other and comparison of regulated businesses against other businesses.
To inform this process, McGrathNicol was engaged in February 2017 to carry out a scoping study into measures of profitability of electricity and gas businesses that could be used by the AER. The report is available on the Initiation page.
On 8 November 2017, we released a discussion paper requesting feedback on possible profitability measures and the data required to calculate these measures. We invited interested parties to make submissions on the discussion paper. Submissions closed on 8 December 2017.
In February 2018, we will publish a draft decision that considers the submissions received in response to the discussion paper and identifies the profitability measures we propose to apply in our performance reporting.
Stakeholders will have the opportunity to comment on the draft decision through written submissions in March 2018, before we publish our final decision on the profitability measures and data requirements in May 2018. The table below sets out the indicative dates for our consultation.
Register your interest
Interested stakeholders can register their interest and be kept informed of developments in this area by sending us an email at firstname.lastname@example.org.