Under the ERA’s draft decision, tariffs for gas distribution remain at their current levels for 2005. For the remainder of the access period (2006 – 2009) the tariff levels are expected to fall annually by 1.5%.
Alinta must respond to the draft decision by 21 March 2005 and a final decision will be released after consideration of these comments. A final access arrangement will be determined thereafter.
Alinta had sought a real pre-tax rate of return for its gas distribution systems of 8.5%, but the ERA’s draft decision is that a rate of 6.5% was consistent with the National Third Party Access Code for Natural Gas Pipeline Systems.
The ERA considered that total revenue from the distribution network of A$454.8 million was consistent with the code.
“Calculated on a comparable basis, Alinta submitted a figure of A$520 million,” the Era said. “The main difference between these amounts is attributable to differences in the rate of return.”
Alinta’s gas distribution systems consist of about 11,300 km of pipelines. They distribute natural gas sourced from the Dampier-to-Bunbury Natural Gas Pipeline and the Parmelia Pipeline to industrial, commercial, small business and residential customers in the mid and south western coastal areas of Western Australia. The distribution systems stretch from Perth to Geraldton in the north and to Busselton in the south.
The first access arrangement commenced on 14 July 2000 when AlintaGas was Government-owned. Following privatisation in October 2000, AlintaGas become a public company (now known as Alinta Ltd) listed on the Australian Stock Exchange. AlintaGas Networks Pty Ltd is 74% owned by Alinta Ltd and 26% owned by Diversified Utility and Energy Trusts.
