AER: final position paper on regulatory treatment of inflation

“The Australian Energy Regulator (AER) has today released a final position paper on its industry wide review of the regulatory treatment of inflation.

This review included both gas and electricity network industry regulation. In broad terms, we reviewed the best method to estimate expected inflation and whether the regulatory framework delivers appropriate compensation for inflation.

Our final position is to maintain the current approach to derive the best estimate of expected inflation. We also find that the regulatory treatment of inflation appropriately compensates for inflation and therefore it is unnecessary to amend our post-tax revenue model (PTRM) and roll forward model (RFM).”

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