ACCC issues draft decisions on GasNet proposals

The Australian Competition and Consumer Commission today issued draft decisions on four revisions proposed by GasNet to its access arrangement for its Victorian gas transmission system.

The ACCC is proposing to approve three of the revisions that would:

• smooth GasNet’s tariff path
• adjust GasNet’s demand forecasts to reflect an increase in the warming trend in the Victorian weather pattern, and
• enable implementation of the revisions for the calculation of the 2005 tariffs.

The ACCC is proposing not to approve a change to the tariff GasNet charges for transporting gas that is withdrawn from its system at TXU's underground gas storage facility at Iona. A concessional tariff applies on these withdrawals, and a full tariff is later charged when the gas is taken out of storage and delivered to Victorian customers.

"GasNet became aware that some gas withdrawn at the concessional rate was being shipped to South Australia via the SEA Gas Pipeline, and has proposed that the lower tariff would only apply if the gas is subsequently reinjected into the GasNet System", an ACCC Commissioner, Mr Ed Willett, said.

"The ACCC understands GasNet's desire to limit the concession to gas that is reinjected into the GasNet System. However, it is concerned about customers who have entered into contracts based on the tariffs approved in 2003 for the period up to December 2007. These customers would have had a reasonable expectation that these tariffs would continue until then.

"On balance, the ACCC's draft decision is to propose to not approve the gas storage tariff change because of its potentially adverse impact on these customers. The ACCC proposes to approve GasNet's other three revisions. The ACCC considers that the benefit to GasNet of these changes is likely to outweigh any detriments to its customers. Approval of these three proposed revisions will have a minimal effect on tariffs".

The ACCC invites submissions from interested parties on its draft decisions by 26 November 2004. The ACCC's decision document will be available on the ACCC's website or by contacting the Gas Branch Administrative Officer on 02 6243 1233.