Review of expected inflation 2017

  • Accepting submissions
Status: 
Category: 
Post tax revenue model
Date initiated: 
18 April 2017
Contact: 
General inquiries - Rate of return RateOfReturn@aer.gov.au
AER reference: 
58744

Overview

Recently, the method for estimating expected inflation has been the subject of debate in our regulatory determinations. Expected inflation is an important parameter for modelling future revenues in both electricity and gas regulatory determinations and is applied uniformly across both sectors.

Our method for estimating expected inflation is set out in the Post-Tax Revenue Model. The National Electricity Rules require us to use the method that is set out in the current version of the model. To fully consider inflation-related issues that have been raised with us, we have instituted an industry-wide consultation and review. The first step of this consultation and review is to seek written submissions on our regulatory treatment of inflation in our determination of revenue and prices for electricity and gas network services.

On 18 April 2017, we published our discussion paper on the regulatory treatment of inflation. The discussion paper is informed by ACCC working paper no. 11 on the best estimates of expected inflation, which can be found under ACCC working & discussion papers. Interested parties are invited to make submissions on our discussion paper by close of business on Thursday 29 June 2017.

Register your interest

While we invite stakeholders to submit written submissions on the discussion paper, we also invite those interested in engaging with us more closely via workshops and forums to register their interest by emailing RateOfReturn@aer.gov.au before close of business on 28 April 2017.

We aim to host our first stakeholder workshop in May 2017.