Overview

AER position
Consultation

Translog opex cost function development

Our distribution benchmarking reports include productivity results from econometric opex cost function models. As a part of incrementally refining elements of the benchmarking methodology, we are continuing to examine options to improve the performance of these models and address some technical issues. 

We initiated a review into the performance of these models with the release for consultation of Quantonomics’ phase 1 memorandum in November 2024. We received 7 submissions. 

On 27 November 2025,  we released, for consultation, Quantonomics’ phase 2 report. We received 6 submissions.

Quantonomics phase 2 report

On 27 November 2025,  we published Quantonomics’ phase 2 report.

This report responds to submissions on Quantonomics’ phase 1 memorandum, and explores approaches to incorporating time-varying inefficiency and other refinements to model specification and estimation techniques that could improve model performance. 

The report and its supporting attachments and files are below.

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Submissions - Quantonomics phase 2 report

We invited network businesses, energy consumers and other interested parties to make submissions to Quantonomics’ phase 2 report by 27 March 2026. We received the following submissions.

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Quantonomics phase 1 memorandum

On 26 November 2024, we published for consultation a memorandum prepared by Quantonomics which examined jurisdiction-specific time trends. Section 8.3 of the 2024 distribution benchmarking report also provides an overview of the issues. 

Quantonomics - Memorandum - Opex Cost Function Development - November 2024
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Quantonomics
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Quantonomics - Opex Cost Function Development - Supporting Files - November 2024
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Quantonomics
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Submissions - Quantonomics phase 1 memorandum

We invited network businesses, energy consumers and other interested parties to make submissions to Quantonomics’ phase 1 memorandum on Translog development by 28 February 2025. We received the following submissions.

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