Consumers should not be paying more than necessary for the energy they need, especially in the face of rising cost of living pressures. But while energy bills are increasing, regulatory settings are returning excessive returns to Network Service Providers (NSP). Setting a fair Rate of Return Instrument (RORI) is a critical part of addressing this and protecting households’ interests.
That’s why we raised a range of critical considerations supporting a lower rate of return in our response to the Australian Energy Regulator’s (AER) RORI Discussion Paper, including:
- The context of ongoing bill rises, inflationary pressures and the consistently high rate of returns to NSPs since the last RORI review in 2022, increasing the importance of a fair RORI;
- redefining the optimal rate of return as the minimum level of return to induce NSP investment, for a more balanced outcome which minimises costs to consumers; and
- whether introducing a weighted trailing average return on debt is a fair choice for households.
What’s next?
The Draft RORI & Explanatory Statement is due for publication in April 2026. With the final determination due in December, we are working in partnership with key consumer and expert stakeholders and will continue to engage in this process and advocate for regulation that promotes fairer prices for all households.
