Review of expected inflation 2017

Post tax revenue model
Date initiated: 
18 April 2017
Effective date: 
31 December 2017
General inquiries - Rate of return
AER reference: 


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.

Consultation on preliminary position

On 13 October 2017, we published our preliminary position on our industry wide review of the regulatory treatment of inflation. Submissions closed on Monday, 6 November 2017.

The next step in our review is the publication of our final position paper in December 2017.

For further details on our preliminary position and subsequent submissions by stakeholders, see the project milestone, AER position.

Indicative project timeline
Step Date

Final position paper

End December 2017
Proposed amendments to PTRM/RFM (if appropriate) January 2018
Submissions on proposed amendment 30 business days from step above
Final decision on amendments

End April 2018