The Australian Energy Regulator (AER) has published its draft decision on the 2026 Rate of Return Instrument (RORI) and is inviting written submissions from stakeholders until 31 July 2026.
The rate of return is a key building block in network revenues because it determines the return network businesses can recover on capital investments. Energy networks are capital-intensive businesses, and the return on capital is typically around half of their revenue. This means the RORI is an important regulatory instrument that influences the prices consumers ultimately pay, while also supporting investment in safe, reliable and efficient energy services as Australia transitions to net zero emissions.
Under national energy laws, the AER must review the RORI every 4 years. Our draft decision reflects our consideration of the views expressed by stakeholders in submissions and the Eligible Experts in their report to the 2026 RORI review. It also builds on the extensive engagement and expert analysis undertaken in past RORI reviews.
Key elements of the draft decision include changes to equity beta, the market risk premium and imputation credits, as well as the reintroduction of Reserve Bank of Australia yield curve data following the resumption of its publication. The draft decision also retains the simple trailing average approach for estimating the return on debt.
We encourage consumer groups, network businesses, market bodies, investors, energy sector stakeholders and other interested parties to review the draft decision and accompanying draft 2026 RORI and provide feedback.
Stakeholder feedback will inform our final decision and help ensure the instrument continues to promote the long-term interests of consumers in relation to the price, quality and reliability of energy services.
We will hold an online public forum on our draft decision on 22 June 2026. Stakeholders can register their attendance here.
We invite written submissions on our draft decision on the 2026 RORI by 31 July 2026