On 30 August the Australian Energy Regulator (AER) released its Draft Rate of Return Guidelines. The AER is responsible for setting the regulated tariffs charged by gas and electricity networks in eastern and southern Australia.
A key element in the process of setting regulated tariffs is the determination of the rate of return that the networks are allowed to earn on their regulated assets. In December 2012, following recent changes to Australia’s electricity and gas rules, the AER launched its Better Regulation programme, which is designed to improve the AER’s approach to regulation. As part of the programme, the AER will publish guidelines on its approach to determining the rate of return for energy networks in mid December 2013. The AER has invited interested parties to comment on the Draft Rate of Return Guidelines by 11 October.
Frontier Economics (Australia) advised the AER on certain aspects of its Draft Rate of Return Guidelines.
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