The Australian Energy Regulator (AER) has issued a final decision to grant an exemption to Power and Water Corporation (Power and Water) from its ring-fencing obligations under sections 139, 140 and 141 of the National Gas Law. 

This exemption relates to the ring fencing of Power and Water’s McArthur River Mining Pipeline in the Northern Territory from its gas supply business. 

The AER considers that Power and Water has satisfied the relevant criteria for granting the exemption under rule 34 of the National Gas Rules. 

The AER considers that, in the circumstances, the cost savings resulting from the exemption outweigh any potential benefits of complying with the ring-fencing obligations. 

Power and Water must comply with the following conditions of the exemption.

• The exemptions expire when the McArthur River Mining Pipeline is made a bi-directional pipeline.
• Power and Water must notify the AER of any material change in circumstances with respect to pipeline capacity and/or configuration.
• Power and Water must notify the AER in advance of any change in contractual arrangements regarding access to the MRM Pipeline.

Power and Water is required under the National Gas Rules to notify the AER, without delay, if it no longer qualifies for the exemption.