In early July the Australian Competition Tribunal found that the ACCC decision, in regard to the valuation methodology it applied to the Moomba to Sydney pipeline, had fundamental errors in principle. The fundamental difference resulted in the ACCC slashing $220 million from the value of the pipeline.
ACCC Commissioner Ed Willett has now told the Australian Institute of Energy in Melbourne that, “The Tribunal’s decision conflicts with the Western Australian Supreme Court decision in the Epic Dampier to Bunbury pipeline (DBNGP) case in some respects, and proposes a new approach to determining the initial regulated value of a pipeline.
“While our appeal application specifically applies to the MSP ruling, this was just the latest in a series of cases going back to 2001 which we believe have tended to leave some important questions unanswered about the Gas Code access arrangements.”
Willett added that a number of appeals against ACCC access arrangement decisions had resulted in “a level of inconsistency in gas code interpretation which ultimately leads to a higher level of regulatory uncertainty that can only be detrimental to the future management of the access regime, for service providers and users alike.”
Last week the Productivity Commission concluded that it is time for comprehensive reform of the gas access regime which covers 23 natural gas transmission and 17 distribution pipelines across the country.
In its report, ‘Review of the Gas Access Regime’, the Productivity Commission called for significant changes to ensure that it doesn't stifle investment and innovation, while at the same time balancing the needs of the consumers. The Australian pipeline and network assets currently regulated by the regime are valued at more than $8.5 billion.
Adding to the drama are the Economic Regulation Authority (ERA) of WA and the Independent Competition and Regulatory Commission (ICRC) of the ACT which have both made announcements in regard to their consideration of access arrangements for Australian gas pipelines.
The ERA has extended the assessment period for its final decision on proposed access arrangements for the Goldfields Gas Pipeline in Queensland for a further two months, until October 15.
Meanwhile, the ICRC has announced that its assessment of proposed revisions to the access arrangement for the ActewAGL natural gas pipeline system for the period of January 1 2005 to June 20 2010 will also be extended for a further two months, to October 31 2004.
