Spreadsheet: 03306e79-5ed2-4f2d-95e3-4f0d41062e9a
Sheet: Sheet1

Input Variable | Shorthand | Value | Discussion | Unnamed: 4 | Unnamed: 5 | Unnamed: 6 | Unnamed: 7 | Unnamed: 8 | Unnamed: 9 | Unnamed: 10 | Unnamed: 11 | Unnamed: 12
General Input
Regulatory Asset Base ($m) | RAB | 1000 | The initial capital base (ICB) is the value of assets on which a return will be earned.  The input sheet requires the value of the ICB at Year 0 (in this case $1,000 million).  The regulatory asset base (RAB),  initially set at the ICB  will fluctuate from year to year to reflect new capital expenditure, asset disposals and depreciation.  In this Cookbook however, the RAB will only fluctuate as a result of depreciation.
Analytical Time Horizon | Time Horizon | 10 | Determines the period over which analysis is conducted.  Default value set equal to economic life of asset
Residual Asset Value |  | 0 | May be assigned when the asset life exceeds the time horizon specified in conjunction with normalisation and price path models.  Set to zero otherwise.
Asset Life |  | 10 | Set equal to economic life of asset
Tax Life |  | 6 | Set equal to tax life specified by the Australian Tax Office for the categorory of assets and commissioning date.
[NAME]
Nominal Risk Free Rate | Rf | 0.05810750000000033 | The Commission uses the five-year Government bond rate as a proxy for the nominal risk free rate to be used in access arrangements of five years duration.  Discussion of the risk free rate can be found in section 6.4 of the DRP.
Real Risk Free Rate | [NAME] | 0.0323 | The Commission uses the indexed bond rate (of similar duration to the regulatory period) as a proxy for the real risk free rate.  The real risk free rate is essentially the nominal risk free rate adjusted for inflation using the Fisher equation.  See page 83 of the DRP for further discussion of inflation and the Fisher relationship.
Cost of Debt Margin over rf | dm | 0.012 | The debt margin is the interest charged by a lender above the risk free rate as compensation for the risk of the borrower not being able to repay the loan.  The model uses a default cost of debt margin of 1.2%.  See section 6.8 of the DRP.
Market Risk Premium | MRP | 0.06 | The market risk premium represents the additional expected return for investing in the market as a whole over investing in risk free instruments such as government bonds.  That is, the level of compensation required to induce investors to assume the risk of the market (in the absence of franking credits).  The model uses a default value for the market risk premium of 6%.  See section 6.5 of the DRP.
Proportion of Franking Credits attributed value by shareholders | g | 0.75 | Gamma is used in the CAPM model to ensure the value of imputation credits is included in the [NAME] calculation.  While the Commission has used a value of 50% for gamma in the past.  Ongoing financial research may lead to revisions of this value in future revenue determinations.  See section 6.7 of the DRP.
LT Proportion of Equity Funding | E/V | 0.4 | The Commission has adopted a benchmark gearing ratio of 60:40 (60% debt 40% equity). See page 80 of the DRP.
Debt Beta | Bd | 0.06 | Used in the derivation of the Equity Beta from the benchmark Asset Beta used.
Asset Beta | Ba | 0.53 | Benchmark Asset Beta for Business being regulated.
Year by Year Input
PERIOD |  | 0 | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10
Operating & Maintenance Costs (current prices) | O&M |  | 50 | 51.24999999999999 | 52.53124999999999 | 53.84453124999998 | 55.19064453124998 | 56.57041064453122 | 57.9846709106445 | 59.4342876834106 | 60.92014487549586 | 62.44314849738326
Volume Forecast (Petajoules pa) |  |  | 30 | 60 | 70 | 80 | 80 | 80 | 80 | 80 | 80 | 80
Colour Convention |  |  |  | POST-TAX REVENUE MODEL |  |  | Version | 1 | Released | October 2001
Period / Year
Input Cell
Parameter - either input or derived
Technical Adjustor
Internal Rate of Return (IRR)
Effective Tax Rate
Macro Button
Non-input / Appearance Only
Smoothed Tariff