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The Gas Access Regime applies to 23 natural gas transmission and 17 distribution pipelines across the country.
The access regime is industry-specific for third party access to natural gas transmission and distribution pipelines. A key element of the regime is the National Third Party Access Code for Natural Gas Pipeline Systems (the Gas Code), which was agreed to by the Council of Australian Governments (COAG) in 1997.
The national regime is implemented by each State and Territory incorporating the Gas Code into its own gas access law. Although many key requirements are common across States and Territories, there are some differences, including such matters as establishing jurisdictional regulators and arbitrators that can lead to regulatory divergences.
In its report, Review of the Gas Access Regime, the Productivity Commission has 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.
The Energy Networks Association has already lodged its support for the recommendations with chief executive Bill Nagle saying the report sent a clear message.
“Governments need to act quickly on this review to ensure that the critical elements are in place for the next wave of investment to meet rising energy demand,” said Nagle.
“We need to get on with the job of making these changes to deliver a more effective, efficient and accountable regulatory regime for energy networks.”
The commission found that the current cost-based price regulation regime has significant drawbacks, including an adverse impact on investment, adding that increased investment would reduce regulatory costs.
Other improvements proposed include tightening the guidance given to regulatory authorities for approvals of access arrangements and reference tariffs; and scope for prospective pipeline owners to obtain from the regulator a binding ruling of no economic regulation for 15 years.
