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.
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
|AER - Preliminary position paper - Regulatory treatment of inflation - 13 October 2017 ( PDF 937.67 KB )||AER|
|Prof Shaun P. Vahey - Report to the AER on estimating expected inflation - 15 September 2017 ( PDF 2.1 MB )||Professor Shaun P. Vahey|
|Sapere Research Group - Report for AER - Efficient allocation and compensation for inflation risk - 25 September 2017 ( PDF 724.09 KB )||Sapere Research Group|