Eastern States Price Determinations – Gas Distributors

Access Arrangements & Price Determinations

Feb 23
Eastern States Price Determinations – Gas Distributors

Australian Gas Networks (2018-2023) – VIC

Australian Gas Networks (AGN) operates gas distribution networks in Victoria and Albany (NSW).  The Australian Energy Regulator (AER) has reported that AGN has applied for a single access arrangement for both networks under r53 of the National Gas Rules.  This is to cover the regulatory proposal due 1 January 2017 and covering the period 1 January 2018 to 31 December 2023 (5 years).

On 5 February, the AER released a position paper on the proposed single arrangements.  This paper noted that the main advantages to having a single access arrangement are:

  • streamlining the access arrangement process;
  • reducing the administrative burden – only one proposal instead of two and single regulatory reports going forward; and
  • greater regulatory certainty.

The AER intends to retain Albany as a separate pricing zone to mitigate any risk of cost cross subsidy between the two networks and losing cost reflective network tariffs for Albany customers.

Interested parties have until 4 March to make submissions on the proposal to the AER.

TasNetworks (2017-2019) – TAS

On 29 January 2016, TasNetworks (TN) submitted its regulatory proposal to the AER. This proposal covers the two years 1 July 2017 to 30 June 2019 and is intended to allow TN to align regulatory reviews for its distribution and transmission networks.

In its submission, TN is proposing to:

  • continue to reduce its annual operating costs, with forecasts of $62.3m and $60.8m for 2017/18 and 2018/19 respectively, below the ‘base year’ annual actual operating cost figure of $68m;
  • retain capital expenditure at levels consistent with actual spend in recent years, $112m and 101.4m for 2017/18 and 2018/19;
  • adopt a cost of capital (6.04%) consistent with recent AER determinations and legal challenges; and
  • maintain service levels

The regulatory proposal is forecasting a reduction in annual revenue of $30m on 1 July 2018 (a reduction of 12.9% real) and a reduction of 2% in revenue in the following year.  These revenue reductions are anticipated to feed through to reduced network tariffs for customers.

The AER is holding a public forum in Hobart on 17 March 2016 to discuss the proposal with customers.  Interested parties have until 28 April 2016 to make submissions on the regulatory proposal to the AER.  The AER’s draft determination is expected around September 2016.

The other price determinations in progress ActewAGL ACT (2016-2021) and Australian Gas Networks SA (2016-2021) are awaiting final decisions from the AER.