LTRCM 2021-224 Nov 2022
Under Schedule 1E.1.2 of the SAU, the ACCC must publish an annual Long Term Revenue Constraint Methodology (LTRCM) determination in respect of the Annual Building Block Revenue Requirement, the Regulatory Asset Base and the Initial Cost Recovery Account (ICRA) for the Initial Regulatory Period.
In making its determination, the ACCC will assess whether NBN Co has complied with the relevant criteria, including prudency criteria, set out in the Special Access Undertaking (SAU).
NBN Co's regulatory information
On 31 October 2022, NBN Co lodged its submission of regulatory information for 2021-22, in accordance with Schedule 1F of NBN Co’s SAU. The regulatory information submitted by NBN Co will be used by the ACCC to inform its LTRCM determination for 2021-22 and to assess NBN Co’s compliance with the price controls set out in the SAU.
Public versions of NBN Co’s regulatory information documents are available below.
ACCC preliminary view
On 14 December 2022, the ACCC notified NBN Co of its preliminary view in relation to the capital and operating expenditure amount proposed by NBN Co in its 2021-22 LTRCM proposal under clause 1E.1.2(c)(vii) of the SAU.
Provided that NBN Co has appropriately excluded capital expenditures that were funded by grants or other third party payments, the ACCC's view is that it does not intend to determine a substitute amount of capital expenditure in accordance with clause 1D.3.2(d) of the SAU or a substitute amount of operating expenditure in accordance with clause 1E.8.2(c) of the SAU.
The ACCC will consider NBN Co’s advice on its treatment of any such funding before publishing our draft determination.
Re-submission of NBN Co's regulatory information
On 28 April 2023, NBN Co provided an updated total revenue figure for its 2021-22 revenue constraints submission which included an additional $42.7 million in grants and other third-party payments it has recognised as ‘other income’ (and associated decreases in its revenue shortfall and ICRA balance).
The ACCC has made its draft determination based on these updated figures.
On 5 May 2023, the ACCC published its LTRCM draft determination for 2021-22, in accordance with Schedule 1E.1.2 of the SAU.
The ACCC’s draft decision is that the regulatory information submitted by NBN Co under Schedule 1F of the SAU for 2021-22 satisfies the requirements outlined in the current SAU. The ACCC proposes to accept NBN Co’s values for the annual building block revenue requirement, regulatory asset base and the initial cost recovery account. We are also satisfied that NBN Co has complied with the relevant price controls in the SAU.
Submissions closed on 26 May 2023.
On 21 June 2023, the ACCC published its final determination on NBN Co’s LTRCM and decision on price compliance for 2021-22.
The ACCC has accepted NBN Co’s proposed values (and the inputs to these values) for the annual building block revenue requirement, regulatory asset base and the initial cost recovery account in accordance with clause 1E.1.2 of NBN Co’s current SAU.
The ACCC is also satisfied that NBN Co’s prices for 2021-22 did not exceed the maximum regulated prices as set out in the SAU.