Part XIC of the Trade Practices Act 1974 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.
The Trade Practices Act enables carriers to apply for exemptions from the standard access obligations that apply to a declared service. The ACCC can only grant exemptions where they promote the long term interests of end users (LTIE).
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.
The ACCC is able 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.
New access disputes
No new access disputes were notified to the ACCC in May.
Competition Tribunal requires Telstra to provide network access to Optus
In May 2009 the Australian Competition Tribunal rejected Telstra’s exemption application to restrict regulated access for Optus in areas where Optus has its hybrid fibre coaxial cable network. The tribunal was not satisfied that Telstra’s application was likely to promote competition or economic efficiency. This affirms the November 2008 decision by the ACCC.
The ACCC delivered two communications-related speeches during May:
On 19 May, by Michael Cosgrave, Group General Manager, Communications Group, at the FTTH Council Asia Pacific Annual Conference and Exhibition: FTTH and the National Broadband Network—opportunity and challenges for competition regulation.
On 21 May, by Graeme Samuel, Chairman of the ACCC at the Australian Telecommunications Users Group Regional Conference, Canberra: National Broadband Network heralds new wave of telecommunications development.
Final decision—framework and approach process for Victorian distribution businesses
On 29 May 2009 the AER published the framework and approach paper for its 2011–15 distribution determination for CitiPower, Powercor, Jemena, SP AusNet and United Energy.
The framework and approach paper states the form of control that will apply to distribution services provided by these distribution network service providers in the forthcoming regulatory control period, and sets out the likely approach to the classification of services and application of a service target performance incentive scheme, efficiency benefits sharing scheme and demand management incentive scheme. The paper, preliminary positions paper and submissions to the AER are available on its website: www.aer.gov.au.
Approval of the ACT and NSW DNSPs’ 2009–10 pricing proposals
On 28 May 2009 the AER determined that ActewAGL’s, Country Energy’s, EnergyAustralia’s and Integral Energy’s pricing proposals complied with legal and regulatory requirements and that all forecasts associated with each proposal were reasonable.
These approved prices will apply from 1 July 2009 to 30 June 2010.
Each DNSP is required to maintain pricing information in relation to approved pricing proposals on their websites.
Final decision—interval meter reassignment requirements
On 26 May 2009 the AER released its final decision on interval (smart) meter reassignment requirements that will apply to Victorian electricity distributors before they can shift customers to time of use tariffs.
The AER's decision implements requirements in the Essential Services Commission’s Electricity distribution price determination 2006–10, that makes provision for tariff reassignment to occur where a smart meter is installed at a customer's premises.
Smart meters, which are being installed under a Victorian Government requirement between 2009 and 2013, will expose customers to new time of use tariffs, delivering real time pricing. This will enable customers to better track their energy use and potentially shift some of their consumption to off-peak times and obtain cheaper tariffs in return.
The AER's final decision takes into account submissions from stakeholders and distributors, following release of the draft decision in March 2009. The final decision can be found on the AER’s website: www.aer.gov.au.
Publication of amended service target performance incentive scheme for electricity distribution network service providers
On 15 May 2009 the AER published the final amended service target performance incentive scheme. This was to make amendments to version 1.0 of the scheme to correct for errors and clarify aspects of its operation.
The final decision and the amended scheme are available on the AER's website: www.aer.gov.au.
In May 2009 the AER approved the annual tariff variations for 2009–10 for the following transmission and distribution pipelines:
Central West pipeline (transmission)
Roma to Brisbane pipeline (transmission)
Central Ranges Tamworth distribution network (distribution).
The tariff variation approval process is undertaken annually for a full regulation pipeline. Tariffs approved at the beginning of an access arrangement period are adjusted to take account of inflation, volume and unaccounted for gas over the access arrangement period. The methodology for the process is established in the pipeline's approved access arrangement. The 2009–10 variation approval process is being undertaken under the code provisions.
Sydney gas distribution network
Consolidation of access arrangements
On 16 April 2009 Jemena Gas Networks (NSW) Ltd (Jemena) requested that its four access arrangements (for the two trunk pipelines, plus the Central West distribution network and the Wollongong–Sydney–Newcastle distribution network) be consolidated into one access arrangement. Without the consolidation, Jemena will be required to provide four access arrangement proposals.
The AER sought comment from interested parties on the proposed consolidation and any conditions that should be applied. No submissions were received.
Extension to submit access arrangement proposals
On 16 April 2009 Jemena requested an extension of two months to submit its access arrangements, pending a decision from the National Competition Council on Jemena’s application to reclassify its trunk pipelines as distribution pipelines.
The AER sought comment from interested parties on the extension of time request, but received no submissions.
Withdrawal of GasNet access arrangement variation proposal
On 8 May 2009 APA GasNet Australia Pty Ltd (GasNet) withdrew their access arrangement variation proposal which had been submitted to the AER on 18 December 2008.
AER reports on AGL rebidding behaviour in South Australia
On 12 May the AER published the results of a comprehensive investigation into the rebidding behaviour of AGL Energy Limited (AGL) during February 2008.
The investigation focused on AGL's rebidding of its Torrens Island Power Station (TIPS) located in South Australia, for the trading day of 19 February 2008. On two occasions on 19 February 2008, AGL rebid up to 75 per cent of capacity at TIPS from low prices to high prices immediately prior to dispatch causing high spot prices.
Bidding capacity at high prices is not a breach of the National Electricity Rules but generators are required to offer and rebid in 'good faith'.
Rebidding immediately prior to dispatch can lead to significant inaccuracies in market forecasting information. Accurate forecasts are crucial for fast-start generator and demand-side responses, and ultimately, efficient market outcomes.
The detailed investigation, however, did not produce sufficient evidence to support a breach of the electricity rules. The investigation has now been closed.
The investigation report is available on the AER’s website at www.aer.gov.au.
Prices above $5000/MWh
On Tuesday 31 March the spot price in South Australia reached $5022/MWh for the 5 pm trading interval due primarily to an unplanned outage at Flinders Power’s Northern Power Station, the largest generating unit in South Australia. This resulted in the dispatch of high priced generation for four five-minute dispatch intervals. Rebidding did not contribute to the high price.
On 7 May, the AER released its $5000/MWh report examining the event. The report can be accessed at the AER website at www.aer.gov.au.
Release of the draft rules and draft advice for the water charge (water planning and management) rules
The ACCC has released its draft rules and draft advice on water planning and management charge rules and is now seeking submissions.
Submissions are due by COBFriday, 5 June 2009.
The proposed rules would require state government departments or agencies to publish details of water planning and management charges.
The ACCC also intends to collect data and report annually on water planning and management activities, costs and cost recovery from users. Under the Act, the ACCC does not have power to collect some of this information so will have to rely upon cooperation from states.
Release of submissions on the issues paper on water trading rules
On 6 March 2009 the ACCC released its issues paper on water trading rules for comment.
Stakeholders were to provide submissions to the ACCC by COB Friday, 1 May 2009. To date, 18 submissions have been received. These submissions are now on the ACCC website for review.
Release of submissions on the water charge (infrastructure charges) rules draft advice and draft rules
On 6 April 2009 the ACCC released its draft advice paper and draft rules on water charge (infrastructure) rules for comment.
Stakeholders were to provide submissions to the ACCC by COB Friday, 8 May 2009. To date, nine submissions have been received. These submissions are now on the ACCC website for review.
ACCC invites comment on Australian Rail Track Corporation Hunter Valley rail network access undertaking
On 23 April 2009 the Australian Rail Track Corporation lodged an access undertaking application in respect of the Hunter Valley Rail Network with the ACCC for assessment under Part IIIA of the Trade Practices Act 1974.
On 29 May 2009 the ACCC released an issues paper and commenced a public consultation on the proposed undertaking by inviting submissions from interested parties. The closing date for submissions is 26 June 2009.
