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

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 will cover Parts 8-12 of the National Gas Rules (NGR).

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 will cover Parts 8-12 of the National Gas Rules (NGR).

The review will recommend amendments that address the Australian Competition and 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.

The COAG Energy Council has asked the AEMC to:

  • make recommendations on any amendments to Parts 8-12 of the NGR that it considers necessary to address concerns that pipelines subject to full regulation are able to exercise market power to the detriment of economic efficiency and the long term interests of consumers
  • consider whether the access dispute resolution mechanism that is set out in the National Gas Law and NGR should be amended to more effectively constrain the exercise of market power by pipeline service providers, and become more accessible to shippers
  • examine the issues in Parts 8-12 that the ACCC inquiry report identified.

The AEMC will also consult with stakeholders on additional issues in Parts 8-12. The AEMC will work closely with the Gas Market Reform Group, in order to provide consistent recommendations.

The review will focus on transmission pipelines, but will also consider the implications of any recommendations on distribution pipelines.

The final report of the AEMC review will be published in June 2018.

The AEMC will publish an Issues Paper by 30 June 2017.

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Documentation