The gas instrument sets out the ERA’s determination of the allowed rate of return on capital for regulated gas network service providers in Western Australia. The rate of return provides an allowance to service providers to help pay interest on loans and give a return on equity to investors.
The ERA utilises different data sources for market returns and information in implementing the gas instrument. For the purposes of calculating the risk free rate and inflation, the gas instrument utilises data sources from the Reserve Bank of Australia (RBA); specifically, the RBA’s F16 statistical table, Indicative Mid Rates of Australian Government Securities.
On 31 March 2023 the RBA ceased publishing the F16 statistical table. Accordingly, this table could not be relied upon as a source for calculating the risk free rate and expected inflation rate.
On 12 September 2023 the rate of return instrument was amended due to the cessation of the RBA F16 Statistical Table. A track changes version of the amended instrument and an explanatory note for this amendment has been published.
The explanatory statement published on 16 December 2022 was not affected by this amendment.
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