Review of method for determining the WACC

The Independent Pricing and Regulatory Tribunal of NSW (IPART) is currently reviewing our methodology for determining the weighted average cost of capital (WACC) we use in setting prices for regulated businesses. The main purpose of our review is to determine whether (and if so how) we should change our current WACC methodology to improve its robustness under changing market conditions, such as those since the global financial crisis (GFC). The purpose of this paper is to discuss the main issues we will consider, set out our preliminary views and analysis, and seek input from stakeholders.