ACT decision on ATCO’s application for a limited merits review

Access Arrangements & Price Determinations

Jul 13
ACT decision on ATCO’s application for a limited merits review

On 1 October 2015, ATCO Gas Australia submitted its application for a limited merits review on the Economic Regulation Authority’s (ERA) Amended Final Decision.  Following a public consultation session in Perth in December 2015 and hearings in February and April 2016, the Australian Competition Tribunal (ACT) published its decision on the limited merits review on 13 July 2016.

The ACT has instructed the ERA to set aside the existing Amended Final Decision and determine components of the decision in line with a gamma of 0.25, rather than the value of 0.4 used by the ERA.  The ERA subsequently reported that the ACT’s decision upheld the ERA’s decision on all other grounds of review.

Whilst the ATCO limited merits review was in progress, the ACT handed down a decision on gamma in NSW (Public Interest Advocacy Centre and Ausgrid) in which it directed that the Australian Energy Regulator should use 0.25 as the value of gamma in its calculations of the rate of return in its decisions the subject of the NSW proceedings.  The ERA states that it would be against the public interest to re-argue matters that had already been considered and decided by the ACT and accepted that the value for gamma should be 0.25.

The ACT also directed the ERA to consider the wider impacts from adopting a gamma of 0.25. The ERA has confirmed that it will comply with the ACT directions and will re-make its decisions as soon as practicable.