Financeability tests and their role in price regulation - IPART - NSW ...
Financeability tests and their role in price regulation - IPART - NSW ...
Financeability tests and their role in price regulation - IPART - NSW ...
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<strong>F<strong>in</strong>anceability</strong> <strong>tests</strong> <strong>and</strong> <strong>their</strong> <strong>role</strong> <strong>in</strong> <strong>price</strong> <strong>regulation</strong> <strong>IPART</strong><br />
43<br />
Organisation Report/Review Date Credit<br />
rat<strong>in</strong>g<br />
applied 27<br />
Fathom<br />
Consult<strong>in</strong>g<br />
Queensl<strong>and</strong><br />
Competition<br />
Authority<br />
Essential<br />
Service<br />
Commission<br />
(Vic)<br />
F<strong>in</strong>al Report for the<br />
Consumer Council of Water<br />
Benchmark Retail Cost<br />
Index for Electricity: 2010-<br />
11<br />
Metropolitan Melbourne –<br />
Water Price Review 2009<br />
F<strong>in</strong>al Decision<br />
F<strong>in</strong>ancial <strong>in</strong>dicators applied Outcome Action considered/taken/proposed<br />
from European regulators<br />
2009 N/A No discussion of f<strong>in</strong>ancial ratios The report provides some discussion of<br />
the f<strong>in</strong>anceability problem. It concludes<br />
that f<strong>in</strong>anceability concerns are not as<br />
significant as water <strong>in</strong>dustry companies<br />
stated.<br />
Most water companies rema<strong>in</strong> above the<br />
lower bound of the <strong>in</strong>vestment grade<br />
spectrum.<br />
Secondly, some water companies had<br />
previously pursued aggressive payout<br />
policies.<br />
These aggressive payout policies have<br />
been paid out of <strong>in</strong>creased leverage.<br />
Vast majority of payout ratios are above<br />
the average payout ratio for the UK<br />
equity market.<br />
December<br />
2009<br />
N/A No discussion of f<strong>in</strong>ancial ratios No discussion of f<strong>in</strong>anceability issue<br />
June 2009 BBB+ No discussion of f<strong>in</strong>ancial ratios No discussion of f<strong>in</strong>anceability,. However<br />
it does state that a BBB+ credit rat<strong>in</strong>g is<br />
used to determ<strong>in</strong>e the debt marg<strong>in</strong> <strong>in</strong><br />
calculat<strong>in</strong>g WACC<br />
Australian Electricity transmission <strong>and</strong> May 2009 BBB+ No discussion of f<strong>in</strong>ancial ratios No discussion of f<strong>in</strong>anceability N/A<br />
<strong>F<strong>in</strong>anceability</strong> could be addressed at<br />
least partially with cuts <strong>in</strong> dividend<br />
payouts. And a less aggressive dividend<br />
policy, these 2measure would tend to<br />
improve the company’s credit rat<strong>in</strong>g<br />
N/A<br />
N/A<br />
B <strong>F<strong>in</strong>anceability</strong> <strong>tests</strong> <strong>in</strong> other jurisdictions