The decision has won the endorsement of the Australian Pipeline Industry Association, which said the Tribunal’s decision represented the most compelling evidence yet of major regulatory error in the ACCC’s judgments relating to the gas transmission sector, according to the Association’s CEO, Dr Allen Beasley.

In November last year 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 ACCC's valuation of the pipeline, which affected the tariff that could be charged, had fundamental errors in principle.

APA had previously described the ACCC decision on tariffs for the MSP as, 'a useful improvement on the previous draft determination, but still representing a fundamental difference of opinion in the method of determining the value of the asset'.

The fundamental difference resulted in the ACCC slashing $220million from the value of the pipeline.

While the ACCC agreed with aspects of APA subsidiary, East Australian Pipeline’s (EAPL), proposed access arrangement, such as proposed capital expenditure and volumes, the ACCC could not agree to EAPL's proposal for the value of the pipeline assets at $779 million or operating costs of $23 million per annum.

The ACCC concluded that the value should be $559 million and that $18 million per annum was a better estimate of the efficient costs of operating the pipeline.

APA managing director Jim McDonald said yesterday’s decision underscored the need for a robust appeals process.

"It shows the need for a merits appeal process to apply across the access pricing of all infrastructure," he said.

"The industry has appealed when we feel the Gas Access Code has been wrongly applied and on balance, the appeals have been overwhelmingly in favour of the industry.

"The Code requires the ACCC to balance the rights of consumers and pipeline investors.

"The regulator has broad discretion and errors have been made. This Tribunal decision has corrected another major error."

McDonald said he anticipated no change to APA's tariffs on the Moomba to Sydney pipeline, which supplies about two thirds of the gas for the Sydney market.

"We believe our tariffs are right where they should be and the Competition Tribunal today has supported the principles that underscore our tariffs in its judgement,'' he said.

Beasley was more strident, saying “the sheer magnitude of the regulatory error corrected in [the] decision once again highlights the very real threat to investment imposed by incorrect regulatory outcomes determined by the ACCC.”

“The outcome clearly vindicates the very strong position taken by the gas transmission pipeline industry against the incorrect application of discretions afforded to regulators under the Gas Access Regime.”