Review of our approach to forecasting opex productivity growth for electricity distributors

Sector: 
Segment: 
Status: 
Date initiated: 
12 September 2018
Effective date: 
30 April 2019
Contact: 
AER General inquiries AERInquiry@aer.gov.au

Overview

We are currently reviewing and refining our approach to forecasting operating expenditure (opex) productivity growth.

Productivity growth is one element in the trend component of our opex forecasting approach. Our forecast of opex productivity growth is intended to capture the efficiency improvements distributors can make in providing distribution services. More details on how we use the forecast the opex trend to assess distributors’ opex proposals are outlined in our Expenditure forecast assessment guideline.

This review is part of our continuous improvement of our regulatory toolkit and will help to ensure that energy consumers pay no more than necessary for the safe and reliable distribution of electricity.

As a next step, we will publish a consultation paper in October 2018. We will provide details on the process and how stakeholders can engage in this review when we release the consultation paper. This will include an opportunity for stakeholders to provide written submissions and to participate in a workshop.

We will publish a final position paper once we have considered all stakeholder feedback.