The AER has released its proposed amendments to the transmission and distribution roll forward models (RFMs) under the National Electricity Rules. The proposed amendments give effect to the changes to tax depreciation set out in AER’s final report on the review of the regulatory tax approach. The amendments allow for the recognition of immediate expensing of certain capex for tax purposes and applies the diminishing value method for tax depreciation to new depreciable assets.
The RFMs also now include a default approach to year-by-year depreciation tracking and other minor changes.
The explanatory statement explains the proposed amendments, and the reasons for our proposed approach. These proposed amendments are implemented in the amended RFMs and revised RFM handbooks.