On 14 December 2016, the COAG Energy Council agreed to the recommendations outlined in Dr Michael Vertigan’s Examination of the current test for the regulation of gas pipelines. Dr Vertigan highlighted the unequal levels of bargaining power and access to information that shippers face when seeking access to pipeline services. He recommended the establishment of a new commercially orientated arbitration framework, pricing principles and information disclosure requirements, to apply to unregulated pipelines that provide access to third parties.
The framework became operational on 1 August 2017. It provides for a staged approach to assist shippers seeking to access pipeline services. The stages consist of information disclosure by non-scheme pipelines, access negotiations, and the arbitration of access disputes.
Details of Tasmanian Gas Pipeline dispute
Under the commercially orientated arbitration framework the AER is the scheme administrator, not the arbitrator. As scheme administrator the AER provides oversight and administration of the framework, including establishing a pool of arbitrators, publishing information about the arbitration, and publishing a non-binding procedural guide for arbitrators and parties to disputes.
As scheme administrator the AER was notified of a dispute between the owners of the Tasmanian Gas pipeline and the shipper on the pipeline AETV in late 2017.
The disputing parties engaged Justin Gleeson SC to undertake the arbitration. The arbitration was completed 12 April 2018.
What the AER has published today
The AER has today published information regarding the arbitration on the Tasmanian Gas pipeline in accordance with the National Gas Rules. The rules are specific on what the AER as scheme administrator is required to publish regarding the arbitration.The contents of the final determination made by the arbitrator, including price and terms and conditions, is confidential.