In its pricing determinations, IPART uses a real rate of return to determine the cost of capital allowance of its building blocks model. This cost of capital allowance forms a substantial part of the annual revenue requirement of utilities. IPART is currently reviewing how it adjusts for expected inflation in deriving the cost of capital. This is the final decision to the discussion paper released in February 2009.
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Final Decision - Adjusting for expected inflation in deriving the cost of capital - May 2009
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