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Application by ActewAGL Distribution

Application by ActewAGL Distribution

Case [2010] ACompT 4 17 September 2010

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AUSTRALIAN COMPETITION TRIBUNAL
Application by ActewAGL Distribution [2010] ACompT 4

Citation: Application by ActewAGL Distribution [2010] ACompT 4

Review from: Australian Energy Regulator

Party: ACTEWAGL DISTRIBUTION (ABN 76 670 568 688), A PARTNERSHIP BETWEEN ACTEW DISTRIBUTION LIMITED (ABN 83 073 025 224) AND JEMENA NETWORKS (ACT) PTY LTD (ABN 24 008 552 663) (ACTEWAGL)

File number: ACT 1 of 2010

Tribunal: JUSTICE FINKELSTEIN (PRESIDENT)
MR R F SHOGREN
DR J S MARSDEN

Date of determination: 17 September 2010

Legislation: National Gas (ACT) Act 2008 (ACT) ss 2, 8(1), 23, 132, 246(1), 259, 261
National Gas Rules rr 41, 43(1), 48, 52, 59(1), 60(1), 62, 64, 72(1)(g), 87

Cases cited: Application by EnergyAustralia [2009] ACompT 8
Australian Competition & Consumer Commission v Australian Competition Tribunal (2006) 152 FCR 33
East Australian Pipeline Pty Ltd v Australian Competition and Consumer Commission (2007) 233 CLR 229
Morley v National Insurance Co [1967] VR 566
Norbis v Norbis (1985-1986) 161 CLR 513
Re Gasnet Australia (Operations) Pty Ltd [2003] ACompT 6

Dates of hearing: 26 & 27 July 2010

Place: Melbourne

Category: No catchwords

Number of paragraphs: 81

Counsel for the Applicant: P Brereton SC and Dr R Higgins

Solicitor for the Applicant: Mallesons Stephen Jaques

Counsel for the Australian Energy Regulator: S Lloyd SC and Dr V Priskich

Solicitor for the Australian Energy Regulator: Corrs Chambers Westgarth

IN THE AUSTRALIAN COMPETITION TRIBUNAL

ACT 1 of 2010

RE:
APPLICATION UNDER SECTION 245 OF THE NATIONAL GAS LAW FOR A REVIEW OF AN ACCESS ARRANGEMENT DECISION MADE BY THE AUSTRALIAN ENERGY REGULATOR (AER), PURSUANT TO RULE 64 OF THE NATIONAL GAS RULES

BY:
ACTEWAGL DISTRIBUTION (ABN 76 670 568 688), A PARTNERSHIP BETWEEN ACTEW DISTRIBUTION LIMITED (ABN 83 073 025 224) AND JEMENA NETWORKS (ACT) PTY LTD (ABN 24 008 552 663) (ACTEWAGL)
Applicant

TRIBUNAL:

JUSTICE FINKELSTEIN (PRESIDENT)
MR R F SHOGREN
DR J S MARSDEN

DATE:

17 SEPTEMBER 2010

PLACE:

MELBOURNE

REASONS FOR DETERMINATION
Background

The applicant, ActewAGL, is a partnership which owns and operates a gas distribution network through which natural gas is delivered to consumers in the Australian Capital Territory and the Queanbeyan and Palerang districts. The distribution network is covered by the National Gas Law (Natioinal Gas (ACT) Act 2008 (ACT), s 8(1)) and the National Gas Rules made under the Law. The object of the Law is “to promote efficient investment in, and efficient operation and use of, natural gas services for the long term interests of consumers of natural gas”: s 23.
The Law required ActewAGL to submit to the Australian Energy Regulator (AER) for its approval under the Rules an access arrangement which set out the terms and conditions upon which third parties could have access to ActewAGL’s gas distribution network: Law, s 132 and Rules, r 52. The proposed access arrangement is required, among other things, to specify the proposed service to which the access arrangement relates and the “reference tariff” for that service: r 48. The reference tariff is the tariff or charge to the…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

AGLC: Application by ActewAGL Distribution [2010] ACompT 4
Case: [2010] ACompT 4
Decision Date: 17 September 2010

CaseChat Overview and Summary

This case involved an application for review of an access arrangement decision made by the Australian Energy Regulator (AER) under the National Gas Law. The applicant, ActewAGL, a partnership that owns and operates a gas distribution network in the Australian Capital Territory and surrounding areas, sought to have the Tribunal review the AER's decision on the access arrangement proposal submitted by ActewAGL. The Tribunal found that the AER fell into reviewable error, as the AER's decision was unreasonable due to the small sample size of bonds and their maturities being too short to be sufficiently representative of the yield on 10-year bonds. The Tribunal also found that the AER's exclusion of the BBI bond from its sample was unreasonable, as there were sufficient qualitative reasons to consider that the bond was anomalous. The Tribunal proposed to vary the AER's decision by taking the average of the Bloomberg and CBASpectrum curves to determine the relevant fair value estimate. It was convenient for the parties to agree on the appropriate orders that should be made varying the AER's decision.

Orders