The AER is calling for stakeholder views on its draft decision for the South West Queensland Pipeline (SWQP) form of regulation review, which it released today.
The draft decision is that the SWQP, owned and operated by APA, should remain a non-scheme pipeline, subject to lighter handed regulation.
We have found the benefits of scheme regulation do not outweigh the increased costs of scheme regulation because:
- it is uncertain whether scheme regulation will substantially improve prices,
- access under non-scheme regulation has the potential to improve in the future
However, we also found that prices for SWQP services may be high and shippers face challenges in negotiating the terms and conditions of access to the SWQP. We propose to monitor prices, terms and conditions on the pipeline as capacity becomes available for contracting. If we see prices on the SWQP increase without reasonable cause, this could justify a further review of the form of regulation of this pipeline.
Invitation for submissions
We strongly encourage stakeholders to provide feedback and comments on the positions we have adopted. This is a draft decision and subject to change, based on a range of factors, including submissions that are provided through consultation and new information we receive. Your feedback is crucial in shaping our final decision for this pipeline, particularly since this is the first form of regulation review for the AER.
Written submissions or requests to make a submission via alternative methods should be emailed to PipelineFOR
aer [dot] gov [dot] au (PipelineFOR[at]aer[dot]gov[dot]au) by 8 November 2024.
Background
The AER gained responsibility for determining the form of regulation of pipelines in March 2023, when reforms to the gas pipeline regulatory regime commenced.
The review of the SWQP is the first of a series of AER initiated form of regulation reviews planned over several years. The SWQP was chosen as the first pipeline for a review due to its importance to the east coast gas system.
The SWQP is a bi-directional transmission pipeline consisting of two parallel pipelines, linking Wallumbilla in south-east Queensland to Moomba in South Australia.