As the energy transition continues across Australia, First Nations people are increasingly taking ownership of renewable energy projects built on their Country. 

For many First Nations households who experience disproportionately high energy hardship, limited access to consumer energy resources (CER), and structural barriers to switching or reducing consumption, Rate of Return Instrument (RORI) decisions can have immediate and severe affordability consequences. 

The Australian Energy Regulator (AER) has an opportunity in this 2026 Rate of Return Instrument (RORI) review to acknowledge and respond to the lived experiences of First Nations consumers, to adopt a cautious and consumer-protective approach to rate-of-return settings, and to help ensure that the energy transition delivers fair and affordable outcomes for all. 

In 2024, all Australian Energy Ministers endorsed the First Nations Clean Energy Strategy as a priority action under the National Energy Transformation Partnership. The Strategy commits governments to ensure First Nations people are not left behind in the energy transition, to improve affordability and essential service access, and to reduce structural energy disadvantage. Given the Strategy’s ministerial endorsement and its explicit relevance to consumer outcomes, it should inform the AER’s interpretation of the long-term interests of consumers in this RORI review. 

The evidence is clear: First Nations households are more vulnerable to energy price increases, more exposed to network charges, and less able to mitigate costs through CER. For these reasons, the AER must adopt a cautious, equity-focused approach to rate of return settings. Past examples of network over-recovery — including the substantial uplift received by Ausgrid under the introduction of the trailing average cost of debt, and widespread over-recovery under earlier inflation methodologies — demonstrate how technical regulatory choices can have unintended but very real consequences for affordability. The AER should avoid repeating this pattern. 

The Network’s view is that the AER should apply a distributional lens to the RORI review, carefully assess affordability impacts on First Nations consumers, and recognise that strong First Nations engagement reduces risk and improves investment certainty. In which, we recognise that network businesses are highly responsive to financial incentives and that the RORI could be a lever for embedding better and more equitable outcomes for First Nations customers if reviewed and audited. However, the long-term interests of consumers, particularly those experiencing structural energy hardship, must be central to the AER’s decisions. 

Read our submission