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 is calling for expressions of interest from stakeholders to participate in an all-day workshop on potential recommendations to key issues. The workshop will be held at the AEMC office in Sydney on 14 December 2017.

The AEMC is calling for expressions of interest from stakeholders to participate in an all-day workshop on potential recommendations to key issues. The workshop will be held at the AEMC office in Sydney on 14 December 2017. Please register here by Friday 24 November 2017 . You can contact Sherine Al Shallah by email (sherine.alshallah@aemc.gov.au) or phone (02 8296 7889) for any further queries.

Interim report

On 31 October 2017 the Commission published an interim report for the review into the effectiveness of regulation of covered gas pipelines.

The interim report:

- summarises stakeholder submissions to the issues paper

- describes the current regulatory framework for natural gas pipelines

- discusses the issues that submissions have raised in relation to the economic regulation of covered pipelines

- identities the issues that will be considered by the Commission in the preparation of the draft report

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 will 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.

The AEMC published an issues paper 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.

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Documentation