The Federal Court of Australia has issued its final orders on the Australian Competition Tribunal's decision on Australian Competition and Consumer Commission's access arrangement for the Moomba to Sydney gas pipeline.
The court has confirmed its orders setting aside the tribunal's decision in relation to the regulatory value of the Moomba to Sydney Pipeline. The court has also confirmed that it has not set aside other aspects of the tribunal's decision that were not subject to appeal by the ACCC.
"The ACCC welcomes the court's clarification of its orders", ACCC Chairman, Mr Graeme Samuel, said. "The interpretation that the court has provided on the task of setting a regulatory value of a pipeline under the gas code is consistent with the approach taken by the ACCC in its December 2003 decision. Also, the court's assessment that the tribunal erred when it found the ACCC had made a fundamental error in principle and that its approach to setting the ICB [initial capital base] was idiosyncratic was particularly pleasing".
In its 2 June 2006 reasons the court found that: "none of the available grounds upon which the tribunal could interfere with the ACCC's determination of the regulatory value of the pipeline (ICB) had been made out. There was no error in the ACCC's findings of fact in relation to its determination of the ICB; nor was the exercise of the ACCC's discretion in reaching that determination incorrect or unreasonable having regard to all the circumstances".
The ACCC appealed the tribunal's decision because it was concerned that the decision was not consistent with legal precedent established in the Western Australian Supreme Court's review of the WA regulator's decision in relation to the value of the Dampier to Bunbury Natural Gas Pipeline. Further the tribunal's approach to valuing the pipeline was not consistent with the gas code and that it did not give sufficient consideration to the manner in which the pipeline had operated in the past.
The ACCC determined in December 2003 that the regulatory value of the pipeline should be set at $545 million. The tribunal establish a regulatory value of the pipeline at $835 million. The matter will now go back to the tribunal for reconsideration according to the law and in accordance with the court's reasons for judgment.