Western Australian Current Regulations Western Australian Current RegulationsINTRODUCTION
This Code establishes a national access regime for natural gas pipeline
systems.
The objective of this Code is to establish a framework for third party access
to gas pipelines that:
(a)
facilitates the development and operation of a national market for natural
gas; and
(b)
prevents abuse of monopoly power; and
(c) promotes a competitive market
for natural gas in which customers may choose suppliers, including producers,
retailers and traders; and
(d)
provides rights of access to natural gas pipelines
on conditions that are fair and reasonable for both Service Providers and
Users; and
(e)
provides for resolution of disputes.
Under the Code, the owner or operator of a Pipeline that is Covered under the
Code is required to lodge an Access Arrangement with the Relevant Regulator.
The Access Arrangement is similar in many respects to an undertaking under
Part IIIA of the Trade Practices Act and is designed to allow the owner or
operator of the Covered Pipeline to develop its own Tariffs and other terms
and conditions under which access will be made available, subject to the
requirements of the Code. The Relevant Regulator will seek comments on the
Access Arrangement and then may either accept it or reject it and specify
amendments it requires to be made to the Access Arrangement. If rejected, the
Access Arrangement must be modified and resubmitted. Under certain
circumstances, the Relevant Regulator may draft and approve its own Access
Arrangement. The legislation which implements the Code provides for
administrative review of certain regulatory decisions made under the Code.
Important features of the Code
are:
· Coverage - the mechanism by which
Pipelines (including distribution systems) become subject to
the Code;
· reliance on an up-front Access
Arrangement outlining Services and Reference Tariffs applicable to a Covered
Pipeline;
· pricing
principles;
· ring
fencing;
· information disclosure
requirements;
· binding arbitration where
there is a dispute;
and
· specific timelines for all processes.
The aim of the Code is to provide sufficient prescription so as to reduce
substantially the number of likely arbitrations, while at the same time
incorporating enough flexibility for the parties to negotiate contracts within
an appropriate framework. The Code has also been designed to provide a clear
national access regime, with consistency between different jurisdictions.
This introduction to the Code and the overview in italics at the beginning of
each section of the Code do not form part of the Code but in certain
circumstances regard may be had to them in interpreting the Code (see
Sections 10.4 and 10.5).
1. COVERAGE
This section of the Code describes the kinds of gas infrastructure which are
subject to the Code and the basis on which particular infrastructure is or may
become subject to the Code.
In relation to the first issue, the scope of the Code is limited to Pipelines
used for the haulage of Natural Gas. The definition of Pipeline includes gas
transmission pipelines and distribution networks and related facilities, but
excludes upstream facilities.
In relation to the second issue, a Pipeline may become Covered in one of four
ways.
· Schedule A lists the Pipelines which are
automatically Covered by the Code (section 1.1).
· In relation to other Pipelines, a case by
case approach applies under which specific criteria are applied to individual
Pipelines to determine whether they are Covered (sections 1.2 - 1.19).
· In addition, where a Pipeline is not
Covered a Service Provider may itself request Coverage by proposing an Access
Arrangement for the Pipeline to the Relevant Regulator for approval
(sections 1.20 and 2.3).
· Finally, if a competitive tender process
approved by the Relevant Regulator is used to select the Service Provider for
a new Pipeline, that new Pipeline will be Covered from the time the Relevant
Regulator approves the outcome of the competitive tender (section 1.21).
The Code accordingly provides a high degree of certainty for the Pipelines
identified in Schedule A, while retaining the flexibility to bring in other or
new Pipelines on a case-by-case basis. Additional flexibility to respond to
changing circumstances exists as a result of the potential for Coverage to be
Revoked where the criteria for Coverage cease to be satisfied.
In simple terms, the process for case by case Coverage is as follows:
· any person may seek Coverage of a Pipeline
by applying to the National Competition Council (the NCC);
· the NCC publishes a public notice on the
application and seeks submissions, including from the Service Provider;
· the NCC considers the submissions and makes
a recommendation to the Relevant Minister, applying specified criteria; and
· the Relevant Minister considers the
recommendation and decides on Coverage.
The term “Pipeline” is defined in the Gas Pipelines Access Law to
include part of a Pipeline. Consequently, an application can be made for the
Coverage of the whole or any part of a Pipeline provided the Pipeline or the
relevant part of the Pipeline is owned or operated by the same Service
Provider or group of Service Providers.
The process for Revocation is similar to the process for Coverage.
As a decision to Cover a Pipeline or revoke Coverage of a Pipeline can have
major commercial implications for the Service Provider and Prospective Users,
the Gas Pipelines Access Law provides a mechanism for review of the decision
by the Relevant Appeals Body.
An extensions/expansions policy in the Access Arrangement for a Covered
Pipeline will define when an extension to, or expansion of the Capacity of, a
Covered Pipeline will be treated as part of the same Covered Pipeline and when
that extension or expansion is to be regarded as a separate Pipeline which may
be the subject of a separate Coverage application.