The Australian Energy Regulator (AER) is the independent regulator for Australia’s national energy market. We are guided in our role by the national electricity, gas, and energy retail objectives set out in in the National Electricity Law (NEL), National Gas Law (NGL) and the National Energy Retail Law (NERL). These objectives focus on the long term interests of consumers.

This initial report is the second step in a review of our regulatory tax approach, following our release of an issues paper in May 2018. We are undertaking this review to ensure that our approach to estimating the tax allowance in regulatory determinations serves the long term interests of energy consumers. The review was prompted by concerns that there was a material difference between:

• the AER's regulatory forecast of tax costs for regulated electricity networks and gas pipelines (together, energy networks) and
• actual tax payments to the Australian Tax Office (ATO) by these regulated energy networks.

This review will consider whether changes to our regulatory tax approach are needed. This will ensure that energy consumers pay no more than necessary for the safe and reliable delivery of electricity and gas services.

We invite submissions on this initial report from all interested stakeholders by 26 July 2018.