ACCC, IPART issue final decisions on Central Ranges pipeline
The Australian Competition and Consumer Commission today issued its final decision to approve a revised access arrangement submitted by Central Ranges Pipeline Pty Ltd for its transmission pipeline in the Central Ranges region of NSW.
The ACCC is currently the regulator of the Central Ranges transmission pipeline under the national gas code. However it is intended that this function will pass to the Australian Energy Regulator. In making this decision, the ACCC has been assisted by advice from the AER.
The Independent Pricing and Regulatory Tribunal also today issued its final decision to approve a revised access arrangement for the Central Ranges Pipeline distribution network, which will take gas from the transmission pipeline to end customers.
The ACCC and IPART had earlier approved a competitive tender process for the pipeline which established key provisions, including the reference tariffs that may be charged until 2019, and both released draft decisions on the proposed access arrangements in October of this year.
Central Ranges Pipeline submitted the revised access arrangements in November 2005 responding to the proposed amendments set out in the draft decisions.
"The revised access arrangement for the transmission pipeline incorporates the amendments outlined in the ACCC's draft decision and now contains the outcomes of the tender and other elements required by the gas code", Mr Steve Edwell, Chairman of the Australian Energy Regulator (and an ACCC associate Commissioner), said.
Mr James Cox, IPART Chief Executive Officer and Full-time Member, said that this is also true for the distribution access arrangement.
"These decisions are significant because this is the first time a competitive tender has determined elements of an access arrangement approved under the national gas code", Mr Cox said.
"The ACCC and IPART have taken less than four months to complete their assessments of the access arrangements. This outcome has been achieved with the cooperation of Central Ranges Pipeline Pty Ltd, through pre-lodgement consultation and discussion of the relevant issues during the assessment period. As a result, Central Ranges Pipeline was able to submit all information and supporting documentation to the ACCC and IPART in a timely manner", Mr Edwell said.
The ACCC's decision documents on the transmission pipeline are available on the website of the Australian Energy Regulator: www.aer.gov.au or by contacting the Access Branch Administrative Officer on 02 6243 1233. IPART's decisions on the distribution network are available from its website www.ipart.nsw.gov.au.
On 3 January 2003 the Central Ranges Natural Gas and Telecommunications Association Incorporated applied for regulatory approval of a tender process in relation to the proposed supply of natural gas to the Central Ranges region of NSW. The ACCC and IPART both approved the tender approval request in accordance with the provisions of the national gas access code (the code).
Subsequently, the association conducted a competitive tender for the supply of natural gas to the Central Ranges region of NSW. The successful tender, announced on 19 November 2003, was made by the Europacific Consortium which consisted of Europacific Corporate Advisory, Country Energy, Colonial First State and Jasdell. The service provider has now been formally incorporated as Central Ranges Pipeline Pty Ltd. Europacific Corporate Advisory put the tender package together. Country Energy is to be the operator of the Central Ranges Pipeline. Jasdell is managing the construction of the pipeline. Central Ranges Pipeline is owned by Sun Super and three funds managed by Colonial Funds Management.
On 19 May 2004 the ACCC and IPART both approved the final approval request lodged in regard to the proposed pipeline. Under sections 1.21 and 3.34 of the code the pipeline became a covered pipeline on this date.
Central Ranges Pipeline Pty Ltd lodged its proposed access arrangement (and access arrangement information) for the transmission pipeline with the ACCC, and for the distribution pipeline with IPART, on 23 August 2005. The ACCC and IPART are each required to review and issue decisions on the proposed access arrangements. The code requires each access arrangement to contain the outcomes of the tender (which include the reference tariff, elements of the reference tariff policy, the additional revenue policy and the revisions commencement date), which are not subject to regulatory assessment at this time, and all the other elements mentioned in sections 3.1 to 3.20 of the code, which are subject to this assessment process.
On 26 October 2005, the ACCC made a draft decision on the transmission access arrangement under section 2.13(b) of the code. In this draft decision the ACCC proposed not to approve the access arrangement. IPART also proposed not to approve the distribution access arrangement in its draft decision released on 27 October 2005. Both regulators included a number of proposed amendments, which they considered would need to be made to the access arrangements in order for them to meet the requirements of the code.
Subsequently on 18 November 2005, Central Ranges Pipeline Pty Ltd submitted revised access arrangements to the ACCC and to IPART that incorporated the amendments proposed in the draft decisions.
The ACCC and IPART have now made final decisions, pursuant to section 2.16(b)(i) of the code, to approve Central Ranges Pipeline Pty Ltd's revised access arrangements. The access arrangement for each pipeline will commence once the pipeline is capable of providing reference services and is expected to remain in place until 2019.
