consistency with how GSL payments have been forecast for previous regulatory control periods. Debt raising Debt raising costs are transaction costs incurred each time debt is raised or refinanced. We forecast them using our standard forecasting approach for this category which sets the forecast equal to the costs incurred by a benchmark firm. Our assessment approach and the reasons for those forecasts are set out in the debt and equity raising costs appendix in the rate of return attachment. Interrelationships In assessing Powercor’s total forecast opex we took into account other components of its regulatory proposal, including: the operation of the EBSS in the 2011–15 regulatory control period, which provided Powercor an incentive to reduce opex in the 2014 base year the impact of cost drivers that affect both forecast opex and forecast capex. For instance forecast maximum demand affects forecast augmentation capex and forecast output growth used in estimating the rate of change in opex the inter-relationship between capex and opex, for example, in considering Powercor’s proposed base year adjustment for the change to its overhead capitalisation policy the approach to assessing the rate of return, to ensure is consistency between our determination of debt raising costs and the rate of return building block changes to the classification of services from standard control services to alternative control services concerns of electricity consumers identified in the course of its engagement with consumers. Assessment of opex factors In deciding whether we are satisfied the service provider's forecast reasonably reflects the opex criteria we have regard to the opex factors. Table 7.6 summarises how we have taken the opex factors into account in making our preliminary decision. Table 7.6 AER consideration of opex factors Opex factor Consideration There are two elements to this factor. First, we must have regard to the most recent annual benchmarking report. The most recent annual benchmarking report that has Second, we must have regard to the benchmark operating been published under rule 6.27 and the benchmark expenditure that would be incurred by an efficient operating expenditure that would be incurred by an distribution network service provider over the period. The efficient distribution network service provider over the annual benchmarking report is intended to provide an relevant regulatory control period. annual snapshot of the relative efficiency of each service provider.
consistency with how GSL payments have been forecast for previous regulatory control periods. Debt raising Debt raising costs are transaction costs incurred each time debt is raised or refinanced. We forecast them using our standard forecasting approach for this category which sets the forecast equal to the costs incurred by a benchmark firm. Our assessment approach and the reasons for those forecasts are set out in the debt and equity raising costs appendix in the rate of return attachment. Interrelationships In assessing Powercor’s total forecast opex we took into account other components of its regulatory proposal, including: the operation of the EBSS in the 2011–15 regulatory control period, which provided Powercor an incentive to reduce opex in the 2014 base year the impact of cost drivers that affect both forecast opex and forecast capex. For instance forecast maximum demand affects forecast augmentation capex and forecast output growth used in estimating the rate of change in opex the inter-relationship between capex and opex, for example, in considering Powercor’s proposed base year adjustment for the change to its overhead capitalisation policy the approach to assessing the rate of return, to ensure is consistency between our determination of debt raising costs and the rate of return building block changes to the classification of services from standard control services to alternative control services concerns of electricity consumers identified in the course of its engagement with consumers. Assessment of opex factors In deciding whether we are satisfied the service provider's forecast reasonably reflects the opex criteria we have regard to the opex factors. Table 7.6 summarises how we have taken the opex factors into account in making our preliminary decision. Table 7.6 AER consideration of opex factors Opex factor Consideration The most recent annual benchmarking report that has been published under rule 6.27 and the benchmark operating expenditure that would be incurred by an efficient distribution network service provider over the relevant regulatory control period. There are two elements to this factor. First, we must have regard to the most recent annual benchmarking report. Second, we must have regard to the benchmark operating expenditure that would be incurred by an efficient distribution network service provider over the period. The annual benchmarking report is intended to provide an annual snapshot of the relative efficiency of each service provider.