The ACCC is vested with powers to arbitrate telecommunications access disputes and make a final binding determination to resolve a dispute. Arbitration hearings are private and the ACCC generally does not make any public comment on disputes except to announce when a dispute has been notified. Two disputes were notified in May, and one interim determination was published.
Notification of two telecommunications access disputes
Optus Networks Pty Limited and Optus Mobile Pty Limited notified the ACCC of two access disputes, one with Hutchison Telecommunications (Australia) Ltd (HTAL) and the other with Hutchison 3G Australia Pty Ltd (H3GA).
These two access disputes relate to the price paid by Optus for the domestic mobile terminating access service supplied by HTAL and H3GA.
The ACCC has commenced the arbitration processes for these access disputes.
As the legislation contemplates that arbitrations be conducted in private the ACCC will not be making any public comment at this stage.
Interim determination in Chime–Telstra arbitration
The ACCC published an interim determination in relation to arbitration between Chime Communications Pty Ltd, a subsidiary of iiNet Ltd, and Telstra Corporation Limited.
The arbitration relates to the terms and conditions of supply of the unconditioned local loop service from Telstra to Chime, which in turn allows iiNet to provide broadband and other services to its customers.
Under the Trade Practices Act the ACCC may make an interim determination in a dispute before making a final determination.
As the legislation contemplates that arbitrations be conducted in private, the ACCC will not be making any further public comment at this stage.
Access undertakings
Division 5 of Part XIC of the Trade Practices Act enables access providers to voluntarily lodge written access undertakings with the ACCC specifying the terms and conditions upon which they agree to supply a specified service. The ACCC can accept or reject the undertaking.
ACCC begins public consultation on Telstra's PSTN and LCS undertakings
The ACCC has released a discussion paper seeking comments on Telstra's PSTN and LCS undertakings. Submissions are due by 16 June 2006.
In March 2006 Telstra submitted an undertaking for the public switched telephone network (PSTN) originating and terminating access (OTA) services and the local carriage service (LCS).
The undertaking sets out how Telstra proposes to meet its standard access obligations to supply PSTN OTA and the LCS for the period from 1 July 2006 to 30 June 2008.
The ACCC released Telstra's undertaking in April 2006 for the information of interested parties.
Australian Competition Tribunal decision on pricing of Telstra's line sharing service
The Australian Competition Tribunal affirmed the ACCC’s decision to reject Telstra's proposed price for the line sharing service.
Telstra had proposed the monthly price of $9 per line in an access undertaking previously lodged with the ACCC.
Telstra had sought a decision from the Australian Competition Tribunal following an ACCC ruling that the price was not reasonable and that the access undertaking should be rejected.
The decision by the Tribunal to affirm the ACCC's decision and reject the access undertaking means that the access undertaking will not come into operation and the price specified in it will not become legally binding.
The price of access to the service will remain subject to agreement between Telstra and its customers and, where agreement is unable to be reached, by ACCC determination of a notified dispute.
Under the National Electricity Rules the AER is responsible for regulating the revenues associated with the non-contestable elements of transmission services provided by Powerlink Queensland (Powerlink). The AER will set Powerlink’s revenue cap for a five-year period from 1 July 2007 to 30 June 2012.
A public forum on Powerlink’s application was held in Brisbane on 20 April 2006. Powerlink provided an overview of its application and interested parties were given the opportunity to comment on the application.
On 3 May 2006 the AER began its formal consultation process, calling for submissions on Powerlink’s application. Interested parties have until 13 June 2006 to provide written submissions to the AER. The AER has engaged PB Associates to help review elements of Powerlink’s application, including capital and operating expenditure and service standards.
The AER plans to release its draft decision on Powerlink’s application in September 2006 with a final decision planned for December 2006.
On 23 May 2006 the AER issued its strategic plan for 2006–08 and work program for 2006–07. The strategic plan sets out the goals and priorities of the AER. With the introduction of new laws and rules for gas and electricity over the coming year, a key focus for the AER will be providing the energy markets with guidance on the operation of the new regime.
The work program sets out key projects for 2006–07. It outlines general timeframes to enable stakeholders to plan for and participate in regulatory processes.
The issue of the strategic plan and work program coincides with the first anniversary of the AER.
The establishment of the AER is a key initiative of the Australian, state and territory governments to improve the operation of the gas and electricity markets. The AER will provide a one-stop-shop for the regulation of gas and electricity networks.
The AER continues to publish weekly market analyses that set out the spot price for each 30-minute trading interval in each region of the National Electricity Market. These reports highlight wholesale market prices more than three times the weekly average. They compare the demand and price forecasts published by NEMMCO four and 12 hours ahead of despatch with actual outcomes and publish the most probable reasons for significant variations between actual and forecast prices. Those reports are available on the AER website.
Two separate price reports detailing the events of 2 and 23–24 February, 2006 when the 30-minute spot price exceeded $5000/MWh, were published on 25 May. Investigations into a further $5000/MWh price event, which occurred on 23 May, are continuing.
Application by GasNet Australia under s. 8.21 of the Gas Code
On 23 December 2005 GasNet lodged an application under s. 8.21 of the Gas Code seeking the ACCC’s agreement that forecast capital expenditure (new facilities investment) in constructing the Corio Loop will meet the requirements of s. 8.16(a) of the Gas Code for roll-in to GasNet’s capital base. The effect of such an agreement would be to bind the ACCC’s decision when it considers revisions to GasNet’s Access Arrangement in 2007. This is the first application of this nature made to the ACCC.
GasNet is the owner-operator of the Victorian Principle Transmission System (PTS) which is the primary transmission system for the delivery of gas throughout Victoria. In its annual planning review VENCorp, the independent system operator of the PTS, identified a major system capacity constraint that would face the PTS in winter 2008. VENCorp recommended that GasNet undertake a major system augmentation to ensure that the PTS has sufficient useable system linepack to cover supply–demand imbalances at this time.
VENCorp identified several ways to achieve the required augmentation and, on the basis of a cost–benefit analysis, recommended the southwest pipeline from Lara to Brooklyn (Corio Loop) be extended. The proposed project requires the construction of a 57 km, 500 mm diameter pipeline, running from the Brooklyn compressor station for 12 km using an existing easement, and then along a greenfields route to meet the southwest pipeline in Lara. The total capital cost of the project is expected to be $70.7 million.
Interested parties were invited to make submissions and provide supporting information on any issues relevant to the application by GasNet by Friday 10 February 2006. The ACCC released a draft decision on 5 April 2006 inviting submissions. In making this draft decision, the ACCC has been helped by the AER. The ACCC’s draft decision, and submissions made, are available on the AER’s website.
The ACCC is considering submissions received in response to the draft decision and expects to release a final decision no later than June 2006.
Annual tariff resets to gas transmission pipelines
On 28 April 2006 Australian Pipeline Trust submitted two notifications for annual reference tariff variations for the Moomba to Sydney Pipeline and the Central West Pipeline. Central Ranges Pipeline Pty Ltd also submitted a notification for an annual tariff variation for the Central Ranges Pipeline on 11 May 2006.
Under the existing access arrangements, these service providers must submit a notification outlining the proposed tariff increase for the forthcoming financial year. In each instance, reference tariffs are designed to change on an annual basis in accordance with the escalation formulas set out in the access arrangements.
On 24 May 2006 the ACCC approved the annual tariff variations proposed for the Moomba to Sydney, Central West and Central Ranges pipelines. The notification of the annual tariffs are available on the AER’s website.
Roma to Brisbane pipeline—revised access arrangement
The ACCC received the proposed revised access arrangement and access arrangement information on 31 January 2006 for assessment under the gas code. The tariffs currently available under the access arrangement are the subject of Queensland Government derogation.
On 18 April 2006 the ACCC considered that APT Petroleum Pipelines Ltd (APTPPL) further provided sufficient information to enable a considered assessment of its application. Accordingly, the ACCC called for submissions to be submitted by 18 May 2006.
Five submissions have been received to date from: Energex, TRU Energy, Origin, Queensland Gas Company and APTPPL. The ACCC is currently reviewing the issues raised in the submissions.
On 15 May 2006 the ACCC organised a roundtable discussion with users and the service provider to discuss the proposed queuing and trading policies for the Roma to Brisbane pipeline.
Details of that meeting will be on the AER’s website.
The ACCC plans to release its draft decision on APTPPL’s application in August 2006 with a final decision planned for October 2006. The access arrangement will set APTPPL’s tariffs for five years, to 1 July 2011.
