The Australian Competition Tribunal has handed down its decision on its review of the Australian Competition and Consumer Commission's tariff determination for gas transportation services on Epic Energy's Moomba to Adelaide Pipeline System (MAPS).
The Tribunal's judgment will allow Epic Energy benchmark revenues averaging approximately $54 million per year over five years and a benchmark tariff per gigajoule of $0.4436 for the first year covered by the Tribunal's determination.
This tariff can be compared with a tariff of $0.4958 proposed by Epic Energy and a tariff of $0.4052 in the determination made by the ACCC.
Epic Energy applied to the Tribunal for review of the ACCC's determination, contending that the ACCC should have approved Epic Energy's revised access arrangement of January 2002 rather than drafting and approving its own access arrangement.
"Epic Energy subsequently withdrew most of its contentions regarding specific elements of its application to the Tribunal including the appropriate rate of return as well as two of three arguments regarding the valuation of the pipeline for the purpose of determining tariffs", ACCC Chairman, Mr Graeme Samuel, said today. "Epic Energy also withdrew its contentions that the code did not permit the ACCC to cover future expansions to the pipeline but maintained that the expansion already completed for the Pelican Point power station should not have been included in the access arrangement".
The Tribunal accepted Epic's remaining argument in relation to the valuation of the pipeline and increased the allowance provided for the base pipe cost for the initial capital base. The Tribunal also agreed that the 25 terrajoule expansion already completed for the Pelican Point power station should not be regulated given the factual circumstances of the pipeline.
The initial capital base for the MAPS has been determined at $369.9 million, compared with the $360.4 million determined by the ACCC and $423 million proposed by Epic. The reduction in the volume of regulated gas resulting from removal of the Pelican Point expansion from the ACCC's access arrangement is the most significant factor influencing the higher benchmark tariff resulting from the Tribunal's decision.
Mr Samuel said that the ACCC accepted the decision of the Tribunal in relation to the matter under review. "The decision primarily relates to the facts of the case rather than legal principles and the ACCC will be guided by the finding in future decisions".