the CAA said - Heathrow Airport

CAP 1027
Chapter 8: The Q6 Regulatory Asset Base
C H A P T E R 8
T h e Q 6 R e g u l a t o r y A s s e t B a s e
8.1 A calculation of the RAB is required in order to derive two important
elements of the price cap, the depreciation charge and the WACC
charge. This chapter sets out the CAA’s analysis of HAL’s RAB and
hence the depreciation charge to apply in Q6. The WACC is
discussed in detail in chapter 9.
8.2 The CAA’s Q5 decision set out how the CAA intended to calculate the
closing RAB for Q5. Q5 started with the RAB value at the close of Q4,
plus or minus movements within Q5 to give a closing RAB value for
Q5. No formulae were set out as to how the RAB would be rolled
forward for Q5+1, although the Q5 decision provides guidance on the
principles. The closing RAB value for Q5+1 is taken as the opening
value for Q6.
Constructive Engagement
8.3 Given the consensus between HAL and the airlines on the use of a
RAB-based methodology, there was little discussion about the
mechanics on how to roll forward the RAB for Q6.
8.4 There was discussion within the capital efficiency workstream on
whether an adjustment should be made to the opening RAB to reflect
potential inefficiencies in HAL’s process for the T3IB project in Q5
(see chapter 13 for details).
HAL’s January 2013 Business Plan
8.5 Figure 8.1 sets out HAL’s calculation of the reconciliation between the
opening Q5 RAB and the opening Q6 RAB.
April 2013 Page 108