Stronger regulation of covered gas pipelines ruled

ACCC, EUAA, gas prices, gas pipelines, GSOO

The Australian Energy Market Commission (AEMC) has made a final determination to implement a range of improvements to how transmission and distribution gas pipelines are regulated across Australia.

These new rules follow a COAG Energy Council rule change request based on recommendations in the AEMC’s recent review of Parts 8-12 of the National Gas Rules to address concerns that customers may be paying more than necessary for gas pipeline services.

The new rules are designed to help gas pipeline users negotiate lower prices and better deals. This will make it cheaper to move gas around the market, helping to keep gas and electricity prices for consumers as low as possible.

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Specifically, the rules:

  • set out a new process for determining which services will have reference tariffs set by the regulator. Reference tariffs are the prices that pipeline operators can charge their customers
  • clarify how regulators calculate efficient costs so reference tariffs can be set at more efficient levels
  • strengthen reporting obligations to support more balanced negotiations. Pipeline owners will be required to provide more relevant, timely and accessible information for pipeline users through the Natural Gas Bulletin Board or on the pipeline owners’ websites
  • give stakeholders, including pipeline users, more input into regulators’ decisions
  • set a clear trigger for pipeline users to start arbitration if negotiations fail.

As some decision processes are currently underway, we have developed an implementation plan that allows the phased introduction of some of the rules to support a smooth transition.

Most provisions of the final rule will commence on March 21, 2019.

The AEMC fast-tracked this rule change as we had already consulted extensively on the issues and recommendations during the Parts 8-12 review.

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