PIAC lodged a submission to the AER’s discussion paper on developing and using profitability measures for regulated businesses. In PIAC’s view, given the contribution of network costs to the spiralling cost of energy, the ability to compare profitability between businesses and across the broader economy will provide important insight for the AER and other stakeholders. This information could be considered in various settings to ensure regulated businesses remain financially viable without excessively high profits at the expense of consumers.
PIAC supports the use of several measures to capture the different aspects of profitability rather than relying on a single measure. PIAC recommends that, wherever possible, the AER, makes available the input data used to calculate the profitability measures. PIAC also recommends the AER review the effectiveness of any profitability measures after implementation to ensure they remain useful.