Market Reviews: Open

Review into the scope of economic regulation applied to covered pipelines

Reference:
GPR0004
Reviewed by:
AEMC
Initiated by:
AEMC
Date initiated:
16-May-2017
Project Leader:
Sherine Al Shallah
Overview

The AEMC published an issues paper on its review into the scope of economic regulation applied to covered gas pipelines on 27 June 2017.

The AEMC published an issues paper on its review into the scope of economic regulation applied to covered gas pipelines on 27 June 2017.

The issues paper aimed to facilitate public consultation on the policy objectives of the gas access regime, in addition to the purpose and operation of the current regulatory framework in relation to the economic regulation of covered gas transmission and distribution pipelines.

Submissions to the issues paper were due by Tuesday 22 August 2017. Twenty submissions have been received.

The AEMC will publish an interim report in October 2017 and a draft report in February 2018. A final report will be provided to the COAG Energy Council in June 2018.

Background

On 5 May 2017, the AEMC received from COAG Energy Council terms of reference to review the scope of economic regulation applied to covered gas pipelines. The review covers Parts 8 to 12 of the National Gas Rules (NGR) which set out how covered gas transmission and distribution pipelines are regulated. These parts include rules on the access arrangement process, information disclosure, revenue and price calculations, access terms and conditions, and an arbitration framework.

In conducting the review, the AEMC is to recommend any amendments that it considers will address the Australian Competition & Consumer Commission’s (ACCC) 2016 finding that fully regulated pipelines may be able to exercise market power to the detriment of consumers and economic efficiency.

In assessing the current framework and any potential amendments, the Commission will be guided by the national gas objective (NGO). While the review will focus on transmission pipelines, it will also consider the implications of any recommendations on distribution pipelines.

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