When a Reference
Tariff is first proposed for a Reference Service provided by a Covered
Pipeline that was in existence at the commencement of the Code, the following
factors should be considered in establishing the initial Capital Base for that
Pipeline:
(a) the
value that would result from taking the actual capital cost of the Covered
Pipeline and subtracting the accumulated depreciation for those assets charged
to Users (or thought to have been charged to Users) prior to the commencement
of the Code;
(b) the
value that would result from applying the “depreciated optimised
replacement cost” methodology in valuing the Covered Pipeline;
(c) the
value that would result from applying other well recognised asset valuation
methodologies in valuing the Covered Pipeline;
(d) the
advantages and disadvantages of each valuation methodology applied under
paragraphs (a), (b) and (c);
(e)
international best practice of Pipelines in comparable situations and the
impact on the international competitiveness of energy consuming industries;
(f) the
basis on which Tariffs have been (or appear to have been) set in the past, the
economic depreciation of the Covered Pipeline, and the historical returns to
the Service Provider from the Covered Pipeline;
(g) the
reasonable expectations of persons under the regulatory regime that applied to
the Pipeline prior to the commencement of the Code;
(h) the
impact on the economically efficient utilisation of gas resources;
(i)
the comparability with the cost structure of new
Pipelines that may compete with the Pipeline in question (for example, a
Pipeline that may by-pass some or all of the Pipeline in question);
(j) the
price paid for any asset recently purchased by the Service Provider and the
circumstances of that purchase; and
(k) any
other factors the Relevant Regulator considers relevant.