Application by APA GasNet Australia (Operations) Pty Limited (No 2) [2013] ACompT 8

AUSTRALIAN COMPETITION TRIBUNAL

Application by APA GasNet Australia (Operations) Pty Limited (No 2) [2013] ACompT 8 Citation: Application by APA GasNet Australia (Operations) Pty Limited (No 2) [2013] ACompT 8

Parties: APA GASNET AUSTRALIA (OPERATIONS) PTY LIMITED

File number: ACT 2 of 2013

Tribunal: MANSFIELD J (PRESIDENT) PROFESSOR D ROUND (MEMBER) MR R STEINWALL (MEMBER)

Date of judgment: 18 September 2013

Catchwords: COMPETITION LAW – National Gas Law (NGL) – review of access decision of Australian Energy Regulator (AER) – transition of access arrangement under National Third Party Access Code for Natural Gas Pipeline Systems to NGL – new access arrangement commenced on 1 July 2013 – whether previous access arrangement left an Interval of delay so rule 92 of the National Gas Rules (NGR) applied and AER properly took tariffs received during interval of delay into account in fixing reference tariffs – previous access arrangement provided revisions commencement date is "the later of 1 January 2013 and the date on which approval of revisions to this Access Arrangement take effect" Held: previous access arrangement continued to operate to 30 June 2013, so no interval of delay existed for rule 92 to apply COMPETITION LAW – National Gas Law (NGL) – review of access decision of Australian Energy Regulator (AER) – determination of opening capital base at commencement of earlier access period under rule 77(2)(a) NGR – adjustment for difference between estimated and actual capital expenditure incurred in that opening capital base – whether adjustment included adjustment for revenue earned on difference as well as the difference in capital expenditure Held: adjustment should not include adjustment for revenue earned on difference in capital expenditure COMPETITION LAW – National Gas Law (NGL) – review of access decision of Australian Energy Regulator (AER) – depreciation allowance – consideration rule 89 NGR – limited discretion of AER – depreciation proposal of access provider did not include inflation adjustment so its revenue profile would be greater in earlier years and tariff profile over period flatter – AER satisfied that proposal did not meet requirement of rule 89(1)(a) as it did not promote efficient growth in market for reference services – common anticipation of significant lessening of reference tariffs from previous access arrangement period – consideration of capacity constraints Held: AER properly exercised limited discretion and refused to approve proposed depreciation schedule in circumstances COMPETITION LAW – National Gas Law (NGL) – review of access decision of Australian Energy Regulator (AER) – rate of return on equity – methodology to determine rate of return on equity discussed – s 87 NGR – consideration of dividend growth model assessment Held: methodology and inputs into modelling by AER not shown to be erroneous COMPETITION LAW – National Gas Law (NGL) – review of access decision of Australian Energy Regulator (AER) – consideration of interaction of ss 65, 258 and 261 of NGL and rules 59-64 NGR