From 1 July 2008, under the National Gas Law, the Australian Energy Regulator is the economic regulator for covered natural gas transmission and distribution pipelines in all states and territories (except WA). As the AER is a constituent part of the ACCC, for administrative simplicity, all ACCC documents relating to the ACCC’s former gas transmission regulation function have been maintained on the AER website.
The AER’s functions and powers in relation to the economic regulation of covered gas transmission and distribution pipelines include:
approval of certain access arrangements required to be submitted by service providers under the National Gas Law and National Gas Rules
review of annual reference tariff variations in accordance with relevant access arrangements
annual monitoring of compliance of service providers’ obligations under the National Gas Law and National Gas Rules
undertaking enforcement functions as required in relation to breaches of the National Gas Law, National Gas Rules and Regulations
hearing disputes in relation to the terms and conditions of access for relevant pipelines
approval of competitive tendering processes and terms and conditions of access for competitive tender pipelines as required under the National Gas Law and National Gas Rules
other functions and powers required to be undertaken under the National Gas Law and National Gas Rules including associated with the Gas Market Bulleting Board.
The ACCC will continue to assess access undertakings and applications for authorisation as these are instruments under the Competition and Consumer Act.
Authorising gas marketing arrangements
Gas exploration and development is usually carried out under joint venture arrangements in which costs, risks and benefits are shared by a number of companies. Typically, joint venturers seek to market their gas on common terms and conditions, including price, and to guarantee their income stream by long-term sales contracts with gas utilities and other large customers.
Both the initial agreements to coordinate marketing and the subsequent individual sales contracts could breach Competition and Consumer Act prohibitions against anti-competitive conduct. These potential breaches of the Act may, however, be authorised if the Commission is satisfied that the benefits to the public exceed the anti-competitive costs.
Recent authorisations granted by the Commission include those for the Market System and Operation Rules (MSOR) which underpin Victoria's wholesale gas market, for an expansion of the Western Australian North West Shelf Project and for the new supply arrangements from the Mereenie Basin in the Northern Territory.
Please note that the AER deals only with matters concerning natural gas. Any inquiries concerning liquefied petroleum gas (LPG) should be directed to the Fuel Group of the ACCC in its Melbourne office or email fuel@accc.gov.au.
