The High Court of Australia has upheld an appeal by East Australian Pipeline Limited against a decision of the Full Federal Court, which had affirmed the ACCC's rejection of the access arrangement for the Moomba to Sydney Pipeline.
The principal issue in the appeal was the construction of the National Third Party Access Code for Natural Gas Pipeline Systems and the methodology used by the ACCC to establish the initial capital base for the pipeline. In 2006 the Full Federal Court, in a unanimous judgment, found that the ACCC's decision on the initial capital base was made in accordance with the code. The High Court has overturned the Federal Court's decision.
"The High Court recognised that setting tariffs for monopoly service providers is a difficult and vexing task," ACCC Chairman, Mr Graeme Samuel, said today.
"This is complex legislation that requires the ACCC to balance a wide range of interests, including the interests of pipeline operators, investors and users.
"The High Court has found that the ACCC and the Federal Court erred in their interpretation of the code in the present case. While the ACCC is disappointed with this result, its primary goal is to ensure there is clarity surrounding the laws governing gas pipeline regulation in this country."
Mr Samuel said the ACCC will review this decision to determine whether it has any implications for the future regulation of gas pipelines by the ACCC and the Australian Energy Regulator.