Last month the Australian Pipeline Trust (APA) had a win against the ACCC with the ACT upholding the company's appeal against its determination on the MSP access arrangement.

The turmoil started last November when the federal resources minister Ian Macfarlane revoked the ACCC's capacity to set tariffs on the main transmission pipeline bringing gas from the Cooper Basin to Sydney.

However, it retained the rights as regulator for the laterals bringing gas to the regional centres on the transmission pipeline route and the sector from Moomba to Marsden.

At the time ACCC chief Graeme Samuel said that the APA revised access arrangement submitted in October did not fully comply with the amendments required and therefore the ACCC drafted its own access arrangement as required under the gas code.

The Tribunal has now set aside the ACCC's determination, finding the valuation of the pipeline, which affected the tariff that could be charged, had fundamental errors in principle. The fundamental difference resulted in the ACCC slashing $220 million from the value of the pipeline.

Now the ACCC is contesting the Tribunal's application of the law, consideration of evidence and reasonableness of its propositions relating to the methodology to be applied when establishing the initial capital base of the pipeline pursuant to the National Gas Code.

The Tribunal's decision rejected the valuation methodology applied by the ACCC and that proposed by the pipeline owner, East Australian Pipeline (a subsidiary of Australian Pipeline Trust). Instead, the Tribunal endorsed an alternative depreciated optimised replacement cost (DORC) methodology as the preferred approach for valuing the MSP.

The Tribunal's preferred methodology is to calculate the asset value by applying DORC based on the net present value of costs as opposed to DORC based on straight-line depreciation, which has been applied by regulators to date.