Final Decision: Access Arrangement DBNGP

Access Arrangements & Price Determinations

Jul 01
Final Decision: Access Arrangement DBNGP

On 30th June, the Economic Regulation Authority (ERA) published its Final Decision not to approve the access arrangement for the the Dampier to Bunbury Natural Gas Pipeline (DBNGP).  Instead the ERA has authored and published its own Access Arrangement and Access Arrangement Information for the access arrangement period 1 January 2016 to 31 December 2020.

The ERA has reduced forecast revenue to $1,845 million for the five year regulatory period down from the $2,341 million forecast by DBNGP (WA) Transmission Pty Ltd’s (DBP), a reduction of 21%.  The ERA states that this is driven by:

  • a revised rate of return to yield a nominal post-tax WACC of 5.83 per cent, compared to DBP’s proposed value of 7.69 per cent;
  • a reduction in forecast capital expenditure of 32% over the forthcoming access arrangement period from $154.29 million to $104.94 million in real terms; and
  • a reduction in forecast operating expenditure of 8% over the forthcoming access arrangement period from $560.84 million to $514.68 million in real terms.

Background:
The DBNGP is the longest gas transmission pipeline in Australia that runs entirely underground, stretching almost 1600 kilometres, to link the gas fields in the Carnarvon Basin with population centres and industry in the South West.