Our Ref:	 Accc_rpresp.doc
Your Ref:	

16 July 1999

Mr M Pearson
General Manager, Gas
ACCC
PO Box 1199
DICKSON  ACT  2602

Facsimile:  02 6243 1199

Dear Mark

Re:  Access Arrangement for Moomba to Adelaide Pipeline

The Revisions Submission Date and the Revisions Commencement Date proposed in Epic Energy’s Access Arrangement for the Moomba to Adelaide Pipeline System submitted on 1 April 1999, were 1 July 2003 and 1 January 2004 respectively (refer clauses 1.2 and 1.3 of the April Access Arrangement).  Epic Energy now proposes that the first Access Arrangement Period be extended and that the above clauses be reworded as follows:

‘1.2	Revisions Submission Date

The Service Provider will submit revisions to this Access Arrangement to the Regulator on 
1 July 2005.

1.3	Revisions Commencement Date

The revisions to this Access Arrangement referred to in clause 1.2  are intended to commence on 1 January 2006.’

Subsequent to the submission of the April Access Arrangement, agreements were executed with the existing shippers (Boral Energy Limited and Terra Gas Trader Pty Ltd) which increased their capacity entitlements in 2004 and 2005 and thereby extended the current level of their system capacity entitlements for the full term of the 1995 haulage contracts.  A consequence of this is that no capacity is available on a firm basis in the pipeline system (without system expansion) until 1 January 2006.

Notwithstanding this, Epic Energy already faced a practical difficulty in meeting the requirements of the National Access Code before 2006 in that FT Service and IT Service, as defined in the Access Arrangement, could not be provided without the construction of new facilities and expansion of capacity.

It was for these latter reasons that clause 4.4 was included in the April Access Arrangement.  However, Epic Energy has given the matter further consideration and is of the opinion that:

(i)	the potential for market confusion will be obviated,

(ii)	transportation service provisions will be less complicated, and

(iii)	tariff determination for the second Access Arrangement Period will be simplified,

if the first Access Arrangement Period is extended up to (and including) 31 December 2005 (when the 1995 Agreements expire).

In order to allow sufficient time for the regulatory approvals process to achieve a 1 January 2006 commencement date, the revised Access Arrangement would be submitted by 1 July 2005.

Effectiveness of April Access Arrangement

Epic Energy maintains its view that the April Access Arrangement cannot be put into effect until the second Access Arrangement Period (commencing on 1 January 2006) and that the processes for establishment of an initial capital base, weighted average cost of capital and the derivation of a reference tariff could be deferred until the proposed July 2005 Revisions Submission Date.  We fully support the objectives of the National Access Code and reiterate our desire to work with the ACCC to provide an access regime in the interim period to 2006 which optimises third party access and pipeline capacity utilisation on fair and reasonable terms.

Epic Energy would be pleased to discuss these matters with you.

Please contact me at any time for further information or clarification.

Yours sincerely

Ashley L Kellett
Manager Commercial & Regulatory Affairs