Submission to the Australian Energy Regulator (AER) on the 2026 Draft Rate of Return Instrument

Setting the rate of return too high distorts investment signals, encouraging overinvestment, contributing to a higher than necessary regulatory asset base.

Our submission (PDF, 535.86KB) to the Australian Energy Regulator (AER)'s Draft Decision on the 2026 Rate of Return Instrument (RORI) posits that the rate of return, and associated parameters, must be set at the lowest possible level that can reliably attract investment. 

While we acknowledge that the AER's Draft Decision reduces the regulated returns earned by businesses, particularly through a reduction in the equity beta, it does not go far enough to achieve this principle in practice. 

We are deeply concerned that the Draft Decision will lead to consumers unnecessarily overpaying to compensate Network Service Providers (NSPs) for risks they are already shielded from.