Rule Changes: Completed

Rate of Return Guidelines review

Reference:
ERC0207
Proponents:
AER
Decision:
Rule made
Amending rule:
2016 No. 9
Commenced:
20-Oct-2016
Amending chapters:
NER: 6.5.2, 6A.6.2, 11.93
Rule version:
84
Other rule versions:
N/A

Overview

On 7 June 2016, the Australian Energy Regulator (AER) submitted a rule change request seeking to extend the timeframe to review the current Rate of Return Guideline. Under the current National Gas Rules and National Electricity Rules, the AER is required to undertake a review of the Guideline every three years, with the next due by 17 December 2016. The AER noted in its rule change request that key elements of the current Guideline are still in contention before the Federal Court of Australia where an outcome to proceedings is unlikely before 17 December 2016.

On 7 June 2016, the Australian Energy Regulator (AER) submitted a rule change request seeking to extend the timeframe to review the current Rate of Return Guideline.

Under the current National Gas Rules and National Electricity Rules, the AER is required to undertake a review of the Guideline every three years, with the next due by 17 December 2016. The AER noted in its rule change request that key elements of the current Guideline are still in contention before the Federal Court of Australia where an outcome to proceedings is unlikely before 17 December 2016.

The final rules extend the first Guideline review deadline to five years to allow more relevant and up to date information to be incorporated.  The AER, and potentially the Economic Regulation Authority in Western Australia, will be required to review the guideline by no later than 17 December 2018.

The new rules under the National Electricity Rules include a specific transitional arrangement to provide additional regulatory certainty for six service providers.

The Commission adopted an expedited process in considering this rule change request as it considered that the proposed rules were unlikely to have a significant impact on the National Electricity Market, gas market, or the regulation of pipeline services. No objections to using this process were received.

The Commission also extended the time between the publication of the consultation paper and the final determination by two weeks to allow more time to consider submissions to the consultation paper. Stakeholders provided 13 written submissions to this process.

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