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. Details of determinations made can be accessed on the public register.
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.
View the list of undertakings currently before the ACCC here.
Declared services
Part XIC of the Trade Practices Act enables the ACCC to ‘declare’ telecommunications services. Upon declaration, standard access obligations apply. The access provider is obliged to supply the service to an access seeker upon request.
The ACCC has the ability to vary or revoke declarations but, with the exception of minor changes, must hold a public inquiry ahead of such changes.
On 3 July 2007 the ACCC published two interim determinations made in June 2007 in two telecommunications access disputes regarding the supply of the local carriage service (LCS) and wholesale line rental (WLR) from Telstra Corporation Ltd to Chime Communications Pty Ltd.
In making the interim determinations, the ACCC maintained consistency with pricing principles and indicative prices for LCS and WLR, to provide that the charges payable by Chime to Telstra to 31 December 2007, except where the parties agree otherwise, are:
local carriage service: 17.92c per call
wholesale line rental: indicative prices of $23.12 per month for Home Line Part and $25.84 per month for Business Line Part.
The ACCC is now progressing towards a final determination in this matter.
ACCC publishes Telstra’s exemption applications for the WLR and LCS
On 11 July 2007 the ACCC published exemption applications made by Telstra in relation to its supply of wholesale line rental and local call resale services for a significant portion of the Australian population.
In its applications, Telstra seeks ACCC orders exempting it from the obligation to supply these wholesale products to its competitors upon request. The ACCC will shortly issue a discussion paper and set a time limit for submissions on the exemption applications by interested parties.
The exemption applications and public versions of Telstra’s supporting submissions can be viewed here.
ACCC issues Telstra accounting separation report for March quarter 2007
On 17 July the ACCC issued its fifteenth imputation testing and non-price terms and conditions report under the enhanced accounting separation regime for Telstra. The report presents data for the quarter ending 31 March 2007.
The report presents an imputation analysis that compared Telstra’s retail prices to the prices of three core telecommunications access services. The analysis is designed to indicate whether margins are sufficient to allow efficient firms to compete against Telstra in the retail market. The analysis is not intended to detect all forms of potentially anti-competitive conduct.
The imputed margins reported across the bundle of fixed-voice services have increased in the quarter. Margins for services supplied over the unconditioned local loop service have also increased.
The report also compares Telstra's customer service levels for wholesale and retail fixed-line telephony and ADSL customers. The report does not indicate any material discrimination by Telstra has occurred for the March 2007 quarter.
On 17 July 2007 the AER hosted a round table forum to discuss the six first proposed transmission guidelines released on 31 January 2007. The forum provided an opportunity for interested parties, stakeholders and AER staff to discuss and clarify all parties' understanding of the issues raised in submissions. The AER will consider the issues raised in submissions and at the forum in finalising its guidelines.
The six first proposed transmission guidelines comprise:
post tax revenue model
roll forward model
service target performance incentive scheme
efficiency benefit sharing scheme
submission guidelines
cost allocation guidelines.
The first proposed transmission guidelines and submissions are available at www.aer.gov.au.
On 25 July 2007 the AER released its proposed pricing methodology guidelines and an explanatory statement that outline the reasons underpinning the proposed guidelines. The AER engaged Network Advisory Services (NAS) to advise it on the development of the proposed guidelines.
The AER invites submissions from interested parties on the proposed guidelines. Submissions close on 5 September 2007. The AER will consider issues raised in submissions prior to developing and publishing final guidelines on or before 31 October 2007.
The draft guidelines follow the April release of an issues paper outlining the AER’s obligations under the National Electricity Rules (NER), canvassing issues relevant to the development of the guidelines.
In accordance with the NER, transmission network service providers are required to submit to the AER a proposed pricing methodology relating to prescribed transmission services that are subject to a transmission determination. The AER is required to assess whether the proposed pricing methodology is consistent with the pricing principles contained in the NER and the AER’s pricing methodology guidelines. The NER requires the AER to develop and publish the guidelines by 31 October 2007.
The proposed guidelines and related documents are available on the AER website (www.aer.gov.au.)
ElectraNet transmission determination
On 24 July 2007 the AER held a public forum on ElectraNet’s proposed transmission determination for the 1 June 2008 to 30 June 2013 regulatory control period.
The AER invites submissions from interested parties on ElectraNet's revenue proposal, proposed negotiating framework and proposed pricing methodology and the AER's negotiated transmission service criteria. Submissions close on 17 August 2007. The AER will consider issues raised in submissions and at the forum in making its draft decision.
Documents associated with the ElectraNet’s transmission determination, including the minutes and presentations made at the public forum, can be found at www.aer.gov.au.
Network service provider exemptions
In July 2007 the AER released its decision to grant specific exemptions to Brisbane Airport Corporation and Cowell Electric from the requirement to register as network service providers (NSPs).
Brisbane Airport Corporation owns and operates a distribution system within Brisbane Airport. Cowell Electric operates distribution systems servicing the Iron Knob, Pimba and Woomera areas in South Australia.
The decision documents for these exemptions and other NSP exemption decisions are available at www.aer.gov.au.
Gas code decisions
Trigger event review for the Amadeus Basin to Darwin pipeline
The Amadeus Basin to Darwin pipeline access arrangement contains a trigger mechanism review under s. 3.18 of the National Third Party Access Code for Natural Gas Pipeline Systems (the gas code).
On 3 July 2007 the ACCC wrote to the interested parties it had identified and requested submissions on whether a trigger event had occurred. Submissions closed on 20 July 2007. The ACCC is currently considering this matter.
The ACCC’s letter inviting submissions from interested parties can be found at www.accc.gov.au.
Trigger event review for the Carpentaria gas pipeline
The Carpentaria gas pipeline access arrangement contains a trigger mechanism review under s. 3.18 of the gas code.
On 29 June 2007 the ACCC wrote to the interested parties it had identified and requested submissions on whether a trigger event had occurred. Submissions closed on 20 July 2007. The ACCC is currently considering this matter.
The ACCC’s letter inviting submissions from interested parties can be found at www.accc.gov.au.
National Energy Reform
Retail Policy Working Group
On 23 July 2007 the AER made a submission to the Ministerial Council on Energy’s Retail Policy Working Group composite consultation paper developed by Allens Arthur Robinson. The RPWG is charged with development of the 2007 legislative package to complete the transfer of the non-economic regulation of distribution and retail functions to the Australian Energy Market Commission and AER. The composite consultation paper consolidates AAR’s recommendations on the national framework for energy non-economic distribution and retail regulation following consultation on five previous working papers.
The AER’s submission expressed support for the overall proposals for the national framework and provided specific comments on a number of recommendations including recommendations that addressed:
the use of generic versus energy-specific regulation
the proposal for the AER to administer a “financial viability” entry test as part of business authorisation for retailers and distributors
the proposed business authorisation and exemption arrangements for embedded networks
the proposed electricity distribution ring-fencing arrangements
national retailer of last resort arrangements.
The AER’s submission, along with the previous submissions it has made to the earlier working papers and the RPWG’s current and previous working papers can be found at www.mce.gov.au.
Markets
Report into prices above $5000/MWh in the NEM in June 2007
On 17 July 2007, the AER released a report into 42 events in the New South Wales, Queensland and Snowy regions of the National Electricity Market (NEM) from 12-28 June 2007 where the spot prices exceeded $5000/MWh.
A number of contributing factors to these high price events were identified:
high demand across the NEM including record peak winter demands in New South Wales and Queensland
constrained electricity supply across the NEM; hydro generating capacity in the Snowy, Tasmania and Victoria continued to be affected by drought
drought also reduced the availability for cooling coal-fired generators, particularly in Queensland
flooding in the Hunter Valley reduced some generator capability in June.
The effect of this tight supply–demand balance was further exacerbated by the bidding practice of some generators, particularly Macquarie Generation.
This report as well as weekly reports and other $5000/MWh reports can be found at the AER’s website www.aer.gov.au.
State of the energy market 2007
The AER released its first state of the energy market report on 26 July 2007. The report provides a comprehensive factual overview of Australia’s electricity and gas industries. It focuses on the AER’s current and future areas of responsibility, including the entire energy supply chain from electricity generation and gas production through to energy retailing. The report comprises a survey of market activity in electricity and gas supported by essays that develop particular issues in more depth.
The State of the energy market 2007 report can be found at www.aer.gov.au.
Arbitration of Sydney Water—Services Sydney Access Dispute
Certain services provided by Sydney Water are declared under Part IIIA of the Trade Practices Act. In November 2006 Services Sydney notified the ACCC of a dispute about the methodology of pricing access to Sydney Water’s declared sewage transportation services supplied by means of its North Head, Bondi and Malabar sewerage reticulation networks.
Services Sydney proposes to compete with Sydney Water to supply consumers connected to these three networks by undertaking the contestable activities involved in providing sewerage services—retailing, sewage treatment and effluent disposal/recycling.
The ACCC made its final determination on 22 June 2007 and released its public arbitration report on 19 July 2007. The ACCC determined that the access price that Services Sydney is to pay Sydney Water in respect of the customers supplied by Services Sydney is Sydney Water's regulated retail price for those customers minus Sydney Water's avoidable costs, plus any facilitation costs associated with providing access.
Avoidable costs are those that Sydney Water could avoid if it no longer directly supplied sewerage services to any customers connected to the North Head, Bondi and Malabar sewerage systems. As avoidable costs include the capital costs associated with Sydney Water’s sewage treatment and disposal infrastructure, access prices will be lower than if only the costs that Sydney Water actually avoids were subtracted from retail prices. Facilitation costs are any additional costs that Sydney Water incurs in providing access to the declared transportation services.
