AER consults on draft regulatory guide for gas pipelines

The Australian Energy Regulator (AER) has published for consultation a draft Regulatory Determinations and Elections Guide (the Guide) for gas pipelines. The Guide is part of the AER’s work arising under the gas pipeline regulatory reforms which commenced in March 2023. Under these reforms, the AER is now responsible for determining the regulatory treatment or level of regulation applied to gas pipelines.

The Guide sets out:

• the AER’s powers and functions relating to determining the level of regulation of gas pipelines (form of regulation determinations), the regulation of new pipelines (greenfields determinations), and classification and reclassification of pipelines
• the process for making applications for form of regulation determinations and greenfields determinations
• how we will assess form of regulation determinations and greenfields determinations and how we will apply the relevant statutory tests
• the process for making pipeline classification and reclassification applications and decisions.

Interested stakeholders are invited to make submissions on the draft Guide by 26 July 2023.  Submissions or queries about this consultation should be emailed to: AERgasreformaer [dot] gov [dot] au (AERgasreform[at]aer[dot]gov[dot]au).

Following consideration of stakeholder views, we expect to publish the final Guide in September 2023.

Background

The gas pipeline reforms to the National Gas Law and the National Gas Rules commenced on 2 March 2023, making a number of changes to the way that gas pipelines are regulated in Australia. These reforms are intended to deliver a simpler regulatory framework which continues to support the safe, reliable and efficient use of, and investment in, gas pipelines, while also:

• posing a more effective constraint on exercises of market power by pipeline service providers;
• facilitating better access to pipelines that would not otherwise provide such access, while minimising the cost and risks associated with regulation where there are no third party users;
• providing greater support for commercial negotiations between shippers and service providers; and
• streamlining governance arrangements.

An overview of the reforms is available from the Department of Climate Change, Energy, the Environment and Water website.