On 18 April 2017 the AER released its discussion paper on the regulatory treatment of inflation. The discussion paper explores the treatment of inflation in our determination of revenue and prices for electricity and gas network services.

The discussion paper is informed by ACCC working paper no. 11 on the best estimates of expected inflation. The paper included an indicative timetable for the review, but we subsequently amended this timetable to allow for additional consultation including a technical workshop.

Our preliminary position was published on 13 October 2017, and our final position on 20 December 2017.

On 14 June 2017, we held a public forum regarding the inflation-related issues that were raised as part of our industry-wide consultation and review. The forum gave stakeholders the opportunity to discuss inflation-related issues and allowed us to engage with stakeholders to consider their main concerns.

If you are interested in finding out more information about the forum, please refer to the public forum material.

We invited interested parties to make submissions on our discussion paper on the regulatory treatment of inflation. Submissions closed on 29 June 2017.

On 9 June 2017, we sought comments from the Reserve Bank of Australia (RBA) on the relative merits of the four different inflation expectation measures we considered as part of the inflation review.

On 6 November 2017, we sought comments from the Reserve Bank of Australia (RBA) on our preliminary position paper. Our letter and the RBA response are available below.

One of the key themes emerging from submissions, and from the forum held on 14 June 2017, was a desire from a number of stakeholders to have a further round of consultation on the treatment of inflation in the regulatory models. In order to provide for this consultation, we decided to delay the indicative timeframe set out in the discussion paper by one month. We subsequently published our preliminary position on 13 October 2017 and final position on 20 December 2017.

On 9 August 2017 we held a technical workshop in Sydney to allow stakeholders to engage with different perspectives on the modelling outcomes.

If you are interested in finding out more information about the workshop, please refer to the workshop material.