Rate of Return Instrument 2022

Rate of return
Date initiated: 
4 November 2019
Effective date: 
31 December 2022
General enquiries - Rate of return RateOfReturn@aer.gov.au
AER reference: 


The Rate of Return Instrument (the Instrument) sets out the approach by which we will estimate the rate of return, and comprises the return on debt and the return on equity, as well as the value of imputation credits. We publish a new Instrument every 4 years, the next is to be published in 2022 and will bind all regulatory determinations in the subsequent 4 years.


14 November 2022 - The AER has decided to delay the publication of the 2022 Rate of Return Instrument until February 2023. The delay will allow us to consider the submissions made in the final instrument and avoid closing off options currently available. The 2018 Rate of Return Instrument remains in force until it is replaced. However, publishing the new instrument in February 2023 will allow it to apply to our next set of regulatory decisions in April 2023.

Our pathway to the new Instrument includes a series of working papers in advance of the main phase of the review and also sets out the role for stakeholder reference groups in our review.

An Independent Panel will support the AER to make the best possible instrument by reviewing the draft Instrument and the information available to us in drafting the Instrument. We will also release an annual update at the end of each year. The review will be informed by significant contribution from stakeholder reference groups: the Consumer Reference Group, our Investor Reference Group and our Retailer Reference Group.

2020 working papers
Topic Draft working paper Final working paper
Energy network debt data 26 June 2020 18 November 2020
International regulatory approaches to the rate of return 27 August 2020 16 December 2020
CAPM and alternative return on equity models 27 August 2020 16 December 2020
2021 working papers
Topic Draft working paper Final working paper
Term of the rate of return 21 May 2021 22 September 2021
Rate of return and cashflows in a low interest rate environment 21 May 2021 22 September 2021
Rate of Return Omnibus Papers 15 July 2021 9 December 2021