Part 23 (Access to non-scheme pipelines) of the National Gas Rules (NGR) provides for an arbitration process to resolve access disputes in relation to non-scheme pipelines.
The arbitration mechanism is intended to provide a credible threat of intervention to constrain the exercise of market power during negotiations. If a dispute is referred to arbitration, the aim is to provide for final resolution in a cost-effective and efficient manner. Part 23 (Division 4) outlines the pricing and other principles that the arbitrator must have regard to when determining access disputes. These principles are designed to provide for access at prices and on other terms and conditions that, so far as practical, reflect the outcomes of a workably competitive market.
Role of scheme administrator
The AER is the scheme administrator under the arbitration mechanism (except for Western Australia).
The AER has established a pool of experienced arbitrators to determine access disputes. The AER refers access disputes to arbitration and liaises with parties on the appointment of a pool arbitrator. Part 23 (Division 4) of the NGR sets out when a dispute can be referred to arbitration and the process for doing so. Parties may select an arbitrator from the AER’s pool of arbitrators. If parties fail to select an arbitrator in accordance with the rules, the AER is then required to decide who the arbitrator will be.
A non-binding arbitration guide has been developed. The purpose of the guide is to give pool arbitrators, prospective users and service providers for non-scheme pipelines guidance about the process for requesting access and the determination of access disputes under the NGL and the NGR.
The AER may correct errors in arbitrated access determinations. It also maintains a register which contains information regarding arbitrated access determinations.
Pool of arbitrators
The AER has established a pool of experienced arbitrators to determine access disputes. If parties fail to select an arbitrator in accordance with the rules, the AER is then required to decide who the arbitrator will be.
Arbitration enquiries should be directed to AERschemeadministrator@aer.gov.au.