Overview
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.
To determine the 2022 Instrument we will undertake an extensive review including multiple rounds of stakeholder consultation. We expect the active phase of this review will commence in the middle of 2021. The 2018 Instrument remains in force until the publication of the 2022 Instrument.
Our pathway to 2022 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 2022 review. 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.
| 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 |
| 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 |