AUSTRALIAN COMPETITION TRIBUNAL
Application by East Australian Pipeline Limited [2005] ACompT 3
APPLICATION UNDER S 39(1) OF THE GAS PIPELINE ACCESS LAW FOR REVIEW OF THE DECISION OF THE AUSTRALIAN COMPETITION AND CONSUMER COMMISSION ON 8 DECEMBER 2003 TO APPROVE ITS OWN ACCESS ARRANGEMENT PURSUANT TO THE PROVISIONS OF THE NATIONAL THIRD PARTY ACCESS CODE FOR NATURAL GAS PIPELINE SYSTEMS AND THE GAS PIPELINE ACCESS LAW
NO 8 OF 2003
GYLES J (Deputy President), MR RC DAVEY and MISS MM STARRS
3 MAY 2005
SYDNEY
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IN THE AUSTRALIAN COMPETITION TRIBUNAL |
NO 8 OF 2003 |
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RE: |
APPLICATION UNDER S 39(1) OF THE GAS PIPELINE ACCESS LAW FOR REVIEW OF THE DECISION OF THE AUSTRALIAN COMPETITION AND CONSUMER COMMISSION ON 8 DECEMBER 2003 TO APPROVE ITS OWN ACCESS ARRANGEMENT PURSUANT TO THE PROVISIONS OF THE NATIONAL THIRD PARTY ACCESS CODE FOR NATURAL GAS PIPELINE SYSTEMS AND THE GAS PIPELINE ACCESS LAW
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BY: |
EAST AUSTRALIAN PIPELINE LIMITED APPLICANT
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GYLES J (Deputy President) MR RC DAVEY MISS MM STARRS |
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DATE: |
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PLACE: |
SYDNEY |
THE TRIBUNAL DIRECTS THAT:
EAPL submit a revised Access Arrangement.
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IN THE AUSTRALIAN COMPETITION TRIBUNAL |
NO 8 OF 2003 |
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RE: |
APPLICATION UNDER S 39(1) OF THE GAS PIPELINE ACCESS LAW FOR REVIEW OF THE DECISION OF THE AUSTRALIAN COMPETITION AND CONSUMER COMMISSION ON 8 DECEMBER 2003 TO APPROVE ITS OWN ACCESS ARRANGEMENT PURSUANT TO THE PROVISIONS OF THE NATIONAL THIRD PARTY ACCESS CODE FOR NATURAL GAS PIPELINE SYSTEMS AND THE GAS PIPELINE ACCESS LAW
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BY: |
EAST AUSTRALIAN PIPELINE LIMITED APPLICANT
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THE TRIBUNAL: |
GYLES J (Deputy President) MR RC DAVEY MISS MM STARRS |
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DATE: |
3 MAY 2005 |
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PLACE: |
SYDNEY |
REASONS FOR DECISION
1 East Australian Pipeline Limited (EAPL) has now submitted Short Minutes of Orders which the Tribunal should make to give effect to its reasons which attach a revised Access Arrangement. The Australian Competition and Consumer Commission (ACCC) has drawn attention to some aspects of the matter. The first point is the tariff path. The Tribunal is satisfied that the tariff path proposed is appropriate.
2 The second point arises from the fact that the EAPL models originally provided for an amount of $40.849 million to be added to the capital base as at 1 July 2005 and treated as new capital expenditure in order to compensate EAPL for the fact that, while the Access Arrangement approved by the ACCC has been in force since 1 January 2004, the variations will not take effect until 1 July 2005. The ACCC pointed out that that figure appeared to have been calculated for the period from 1 July 2003 rather than 1 January 2004 and suggested that the amount for the shorter period was $34.35 million. It also drew attention to the fact that there are various means by which that amount could be treated. EAPL has accepted the amount of $34.35 million for the purposes of having the Access Arrangement approved. The practical effect of what is proposed is to increase the tariff from now on above the rate that would have been applicable if the matter had been properly resolved by 1 January 2004. In other words, future consumers will be levied to make up for the theoretical loss of revenue caused by delay in having this Access Arrangement settled.
3 Even if that approach were authorised by the National Third Party Access Code (the Gas Code) and the Gas Pipeline Access Law (the Gas Law) (as to which there is serious doubt), the Tribunal is firmly of the view that such a result would be inappropriate. In the principal decision (Application by East Australian Pipeline Limited [2004] ACompT 8 at [35]) and in the second decision (Application by East Australian Pipeline Limited [2005] ACompT 1 at [11]) attention was directed to the tight timelines which are laid down for the approval of an Access Arrangement in the Gas Law and the Gas Code. It is clearly contemplated that it should come into force as soon as possible after coverage. That expectation is important for the public and consumers as well as for the proponent. The time that this approval has taken is well beyond anything contemplated by the Gas Law and the Gas Code. The Tribunal is aware that the delay has had little operative effect because of existing commercial arrangements. That provides no reason for penalising future users of the monopoly pipeline.
4 It is submitted for EAPL that neither the Gas Code nor the Gas Law presents any legal impediment to the under-recovery being incorporated in the calculation of the tariff. That is not the right question. The question is ‘what part of the Gas Code or the Gas Law authorises such incorporation?’. The Tribunal does not agree with the submission that s 8(1)(a) of the Gas Code provides an appropriate source. The purpose of the exercise by the Tribunal is to fix a proper tariff for the service provided, not to compensate or reimburse the proponent for delays in settling the Access Arrangement. There is no objection to backdating the Access Arrangement provided that the tariff is not thereby increased.
5 EAPL should submit a revised Access Arrangement to accord with these reasons.
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I certify that the preceding five (5) numbered paragraphs are a true copy of the Reasons for Ruling herein of the Tribunal. |
Associate:
Dated: 3 May 2005
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Counsel for EAPL: |
NL Manousaridis |
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Solicitor for EAPL: |
Middletons |
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Counsel for the ACCC: |
MAC Painter |
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Solicitor for the ACCC: |
Deacons |
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Date of Hearing: |
6 April 2005 |
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Date of submission of Minutes of Order: |
15 April 2005 |
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Date of Decision: |
3 May 2005 |