We were not satisfied Ergon Energy had demonstrated it faced increased regulatory obligations or requirements in the forecast period. The proposals were for costs which we would typically consider to be business as usual expenses, and therefore taken into account in our estimate of base opex. Corporate income tax The NER requires us to make a decision on the estimated cost of corporate income tax for Energy's 2015–20 regulatory control period. The estimated cost of corporate income tax contributes to our determination of the total revenue requirements for Ergon Energy over the 2015–20 regulatory control period. It enables Ergon Energy to recover the costs associated with the estimated corporate income tax payable during that period. We forecast Ergon Energy's corporate income tax allowance at $204.2 million ($ nominal) over the 2015–20 regulatory control period as set out in table 10. This is instead of Ergon Energy's proposed cost of corporate income tax allowance of $621.4 million. Our preliminary decision is 38.5 per cent of the amount Ergon Energy proposed. Table 10 AER's preliminary decision on Ergon Energy's cost of corporate income tax allowance for the 2015–20 regulatory control period ($ million, nominal) 2015–16 2016–17 2017–18 2018–19 2019–20 Total Tax payable 60.5 64.6 68.6 74.6 71.9 340.3 Less: value of imputation credits 24.2 25.8 27.5 29.9 28.8 136.1 Corporate income tax allowance 36.3 38.8 41.2 44.8 43.1 204.2 Source: AER analysis. Our preliminary decision reflects our amendments to some of Ergon Energy's proposed inputs for forecasting the cost of corporate income tax such as the opening tax asset base, and the remaining tax asset lives. It also reflects our preliminary decision on the value of imputation credits (gamma) discussed in attachment 4. Our preliminary decision changes to other building block costs that affect revenues also impact the tax calculation. Details of our preliminary decision on the corporate income tax allowance are set out in attachment 8.
We were not satisfied Ergon Energy had demonstrated it faced increased regulatory obligations or requirements in the forecast period. The proposals were for costs which we would typically consider to be business as usual expenses, and therefore taken into account in our estimate of base opex. Corporate income tax The NER requires us to make a decision on the estimated cost of corporate income tax for Energy's 2015–20 regulatory control period. The estimated cost of corporate income tax contributes to our determination of the total revenue requirements for Ergon Energy over the 2015–20 regulatory control period. It enables Ergon Energy to recover the costs associated with the estimated corporate income tax payable during that period. We forecast Ergon Energy's corporate income tax allowance at $204.2 million ($ nominal) over the 2015–20 regulatory control period as set out in table 10. This is instead of Ergon Energy's proposed cost of corporate income tax allowance of $621.4 million. Our preliminary decision is 38.5 per cent of the amount Ergon Energy proposed. Table 10 AER's preliminary decision on Ergon Energy's cost of corporate income tax allowance for the 2015–20 regulatory control period ($ million, nominal) 2015–16 2016–17 2017–18 2018–19 2019–20 Total Tax payable 60.5 64.6 68.6 74.6 71.9 340.3 Less: value of imputation credits 24.2 25.8 27.5 29.9 28.8 136.1 Corporate income tax allowance 36.3 38.8 41.2 44.8 43.1 204.2 Source: AER analysis. Our preliminary decision reflects our amendments to some of Ergon Energy's proposed inputs for forecasting the cost of corporate income tax such as the opening tax asset base, and the remaining tax asset lives. It also reflects our preliminary decision on the value of imputation credits (gamma) discussed in attachment 4. Our preliminary decision changes to other building block costs that affect revenues also impact the tax calculation. Details of our preliminary decision on the corporate income tax allowance are set out in attachment 8.
AER%20-%20Preliminary%20decision%20Ergon%20Energy%20-%20Overview%20-%20April%202015.docx