The access arrangement decision made by the AER in July 2011 in respect of Envestra Limited’s SA gas distribution network was the subject of an application for review in the Australian Competition Tribunal (Tribunal). 

Envestra sought review of the decision made by the AER in respect of the following matters:

(a) the methodology and the estimation of the debt risk premium;
(b) the estimation of the market risk premium;
(c) the estimation of the forecast volume of unaccounted for gas;
(d) the forecast costs for Envestra’s network management fee.

The National Gas Law requires an applicant to apply to the Tribunal for leave to apply for review. The Tribunal heard submissions on the issue of leave on 12 October 2011.

On 10 February 2012, the Australian Competition Tribunal (Tribunal) made its final determination in relation to the access arrangement made by the AER in July 2011 for the South Australian gas distribution network owned by Envestra. The determination varied the AER’s approach to calculating the allowance for the cost of debt, and overturned the AER’s decision to not allow Envestra to recover the costs of a ‘network management fee’ margin included in the charges paid to APA, a related party which provides network services to Envestra.