On 19 April 2018, Jemena Gas Networks (JGN) submitted to the AER a proposed enforceable undertaking for JGN's New South Wales gas distribution network. On 23 April 2018, the AER accepted the enforceable undertaking from JGN. On 4 May 2018, JGN submitted to the AER an annual tariff variation notice for the distribution network. We have assessed JGN's tariff variation for compliance with its enforceable undertaking and its approved access arrangement.
The AER and JGN have developed a new enforceable undertaking which sets out how JGN's revenues and network tariffs will be determined from 1 July 2018 to 30 June 2019. The enforceable undertaking also obliges JGN to continue to provide network services consistent with the non-price terms and conditions of its 2015-20 access arrangement. A similar approach was undertaken for the period 1 July 2017 to 30 June 2018.
JGN offers the enforceable undertaking because in February 2016 the Australian Competition Tribunal set aside the AER’s May 2015 access arrangement decision for JGN. Subsequently, the AER sought judicial review of the Australian Competition Tribunal decision in the Full Federal Court of Australia and the decision has been remitted to the AER to re-make. An enforceable undertaking can set out placeholder arrangements that provide transparency and certainty over network tariffs, on an interim basis, until the allowed revenue that JGN may ultimately recover from customers is determined through the remittal process.
The AER's approach to establishing new interim arrangements through entering into new enforceable undertakings with JGN was set out in an open letter published on the AER's website in March 2018.
On 7 June 2018, the AER published the approved 2018-19 tariff variation for JGN (NSW).