For Western Australia’s regulated gas pipelines, the ERA determines an allowed rate of return on service providers’ projected capital bases as part of setting regulated revenues for an access arrangement.
The National Gas Law requires the ERA to produce a gas rate of return instrument setting out how the ERA and regulated entities will calculate the rate of return for the duration of the instrument.
The ERA published a gas rate of return instrument on 18 December 2018 that set out the ERA’s position at that time on determining the allowed rate of return on capital.
The ERA is required to review the current gas instrument and replace it by the fourth anniversary of when the current instrument was published, which will be December 2022. The 2022 gas instrument will then be used to determine the rate of return for gas service providers’ future access arrangements.