As part of the Better Regulation reform program, the AER released its Rate of Return Guideline on 17 December 2013. The Rate of Return Guideline sets out how we determine the return that electricity and gas network businesses can earn on their investments.
Implementation of guideline
Following the release of the Rate of Return Guideline, the AER undertook further work to prepare for implementing the guideline. On 2 May 2014, we released an expert report by Professor Henry on the calculation of empirical estimates of the equity beta. On 7 April, we released an issues paper on which third party data service provider we should use to estimate the return on debt. On 19 May 2014, we received nine submissions on the issues paper.
Further consultation on implementing the Rate of Return Guideline will take place as part of the regulatory reset process for individual service providers.