Review of treatment of inflation 2020

Date completed: 
31 December 2020
Date initiated: 
7 April 2020
Effective date: 
17 December 2020
General enquiries - Inflation review
AER reference: 


We undertook this comprehensive review of our treatment of inflation in our regulatory framework to consider whether our inflation approach remained appropriate. This allowed us to consider possible changes to our approach, including the method likely to result in the best estimates of expected inflation, and target return of the regulatory framework target.

We initiated the review on 7 April 2020 and released a discussion paper on that sought stakeholders submissions. We also held a public forum on our discussion paper and technical workshop to explore scenarios and mechanics for possible changes to the regulatory framework for the treatment of inflation. In October 2020, we released our draft position followed by a stakeholder forum and a further round of submissions.

On 17 December 2020 we released our final position paper on the treatment of inflation in the regulatory framework. The final position paper outlines how inflation will be treated in our decisions for regulated electricity and gas networks.