However the Court has stopped short of directing the regulator to allow a higher tariff, and has instead instructed him to exercise his discretion in accordance with the provisions of the National Access Code.
The judgement is long and complex but essentially has instructed the Regulator to take into account other business interests and specific circumstances of the pipeline considerations when reviewing his initial decision.
Epic Energy's Chief Executive Officer, Ms Sue Ortenstone, said the Supreme Court's decision was a great result for the company and a watershed decision for the Australian pipeline industry.
"Our legal action was the first challenge to the interpretation of the application of the price setting provisions of the National Third Party Access Code (The Code) since its introduction four years ago.
"This decision is a vindication of our interpretation of the National Third Party Gas Access Code, and confirms that we do have a just cause to believe that Epic's submission of $1/GJ to Perth and $1.08/GJ south of Perth is appropriate and encourages future development in the state."
Ortenstone said the court had determined that regulators now must take into account the business interests and circumstances of each pipeline on a case by case basis, rather than relying on economic theory.
"We are confident the Regulator will give our issue priority, as well as the comments contained in the 100 or so submissions received during the public consultation process, in formulating a new decision," she said.
How the decision affects gas consumers in the state is unsure, with retailer AlintaGas saying that the decision would have no immediate impact on prices and that it hoped the dispute would be solved as quickly as possible.
"We believe it is in the interests of all parties concerned - Epic and its customers - that the protracted regulatory dispute is concluded as soon as possible," said AlintaGas CEO Bob Browning.
Other memebers of the pipeline sector welcomed the decision. Dr Allen Beasley, head of the Australian Pipeline Industry Association said it was a landmark decision for Australia's pipeline industry.
"This decision sends an important signal on the required balance to both the WA Regulator and the ACCC," he said.
“The principles surrounding this decision are relevant to each and every transmission access decision around our nation.
“This decision must be seen as the catalyst for a more flexible, fair and forward looking approach to applying competition policy in the gas transmission sector.”
WA Energy Minister Eric Ripper said the Government was still analysing the judgement, but it seemed clear that the decision supported the Government's view that the regulator should be allowed to carry out his role under the Gas Pipelines Access (Western Australia) Act 1998 independent of Government direction.
"The independent regulator, I understand, will now undertake further public consultation, taking into account the decision of the Supreme Court, before he makes his final decision," he said.
Mr Ripper said calls by the Leader of the Opposition for the Government to influence the independent regulator's decision were disturbing.
"The Leader of the Opposition has clearly forgotten his second reading speech to State Parliament when he set up the office of the independent Regulator," he said.
