The Australian Energy Regulator today issued its final decision on the access arrangement proposal for the Roma to Brisbane Pipeline (RBP) for the period 1 September 2012 to 30 June 2017.
"The AER’s final decision is expected to result in almost no change in a typical residential customer’s bill over the next five years," AER chairman Andrew Reeves said.
"The RBP is a transmission pipeline so its charges make up only a small percentage of a residential customer’s bill. The largest components of a residential customer’s bill are the cost of the gas and the cost of the distribution network."
For large industrial users, this final decision is expected to increase overall gas prices by approximately 10 per cent over the life of the access arrangement. This compares to an expected residential price impact of around 1.5 per cent over the life of the access arrangement.
The pipeline is both owned and operated by APT Petroleum Pipeline Pty Limited (APTPPL) which is a part of the APA Group. Natural gas is transported from the gas hub near Roma to the markets of Brisbane and the regional centres along the pipeline route.
Customers of the RBP include Incitec Pivot, CS Energy’s Swanbank Power Station, BP’s Bulwer Island Refinery, the South West Queensland Producers, and energy retailers AGL and Origin Energy.
The AER's final decision has resulted in total revenue of $262.7 million over the access arrangement period of 1 September 2012 to 30 June 2017. APTPPL had proposed total revenue of $325.3 million in its revised access arrangement proposal, an increase of 90 per cent over approved revenue in the earlier access arrangement period.
The key differences between the AER’s final decision and APTPPL’s access arrangement proposal are principally driven by the regulated rate of return and operating expenditure.
For the final decision, the AER has approved a regulated rate of return of 7.31 per cent.
"If the AER were to accept APTPPL’s proposed regulated rate of return of 8.79 per cent, the final decision would have resulted in total revenue increasing by a further $39 million over the access arrangement period," Mr Reeves said.
"In addition, if the AER had accepted APTPPL’s proposed operating expenditure and capital expenditure in its final decision, this would have resulted in total revenue increasing by a further $24 million over the access arrangement period."
In its revised queuing requirements, APTPPL proposed a first-come-first-served approach involving a deposit for existing capacity, and an open season approach without a queue for developable capacity. The AER proposes a preferable alternative which accepts the use of a deposit mechanism for existing capacity and an open season approach for developable capacity.
In making this final decision, the AER took into account advice from independent experts and submissions from interested parties.
The final decision and related documents are available under related content.