The AER has released its first Gas pipeline monitoring and transparency report on the behaviour and compliance of gas pipeline service providers.
Background
Stemming from the 2023 gas pipeline regulations, we obtained new monitoring and reporting powers aimed to address concerns of under-regulation and the potential market power of gas pipeline service providers.
We use our powers to monitor the behaviour of service providers see them as a critical tool to inform our power to initiate form of regulation reviews. These reviews ensure that the appropriate level of regulation is applied to pipelines to promote access.
The report:
- supports our responsibility for evaluating what forms of regulation should apply to individual pipelines
- promotes greater market transparency which helps shippers in their negotiations with service providers
- keeps policymakers, governments and the public informed about how gas is transported to where it needs to go, and the extent and impact of market power on those services.
We are firmly committed to enhancing the availability of information on key gas pipelines to ensure greater transparency and monitoring of market behaviour.
Our next report is expected to be released mid-2026 to align with the release of our inaugural Wholesale gas market performance report. Our second report will provide a more complete analysis of the extent to which the new gas pipeline reforms are delivering against their intended aims.
This report was originally intended to cover a 2-year period (2 March 2023 to 2 March 2025), with the following report due by 2 March 2027. However, given the foundational scope of this report, publication of the second report will be moved forward to 2026. The second report will cover the period March 2025 to the publication date in 2026.
Insights
As outlined in the report, we found:
- there is limited transparency in the prices and non-price terms and conditions set by service providers due to the information published by service providers being complex and inconsistent. This limits the assistance the information provides to pipeline users in negotiations with service providers for access to pipeline services. As a result, we are considering implementing a standard template which service providers must use.
- Pipeline users reported different experiences and bargaining power to negotiate terms and conditions for pipeline services. This was supported by our own analysis which indicated that some users may have limited ability to negotiate across pipelines.
- The 2023 regulations have not yet been fully implemented as additional information is to be published from December 2025. This information is expected to deliver improved transparency by providing pipeline users with cost-based pricing benchmarks.
- While compliance with the publishing of the actual prices payable information requires improvement, there were only a few instances of non-compliance among service providers relating to other obligations. These instances were self-reported, and we consider were primarily due to a lack of understanding of new obligations under the regulations. We anticipate this confusion will be rectified following the release of the AER Compliance Procedures and Guidelines and the Gas ring-fencing decision guide.