Application by DBNGP (WA) Transmission Pty Ltd (No 3)

In this case, DBNGP (WA) Transmission Pty Ltd (DBP) sought a review of a decision made by the Economic Regulation Authority of Western Australia (ERA) concerning an access arrangement for the Dampier to Bunbury Natural Gas Pipeline. The ERA had initially proposed a draft decision rejecting DBP's revision proposal for the access arrangement, subsequently publishing a final decision that also declined to approve the revised proposal. DBP lodged submissions in response to the ERA's proposed amendments and the subsequent final decision, leading to the ERA publishing an amended final decision and its own access arrangement. The primary legal issues for the court to determine were whether the ERA had made any reviewable errors in its application of the National Gas Rules (NGR) and in its calculations and determinations related to the rate of return, capital base, regulatory expenses, and reference services.

The court considered whether the ERA had correctly applied NGR rule 87, determining that the ERA was not required to adjust the rate of return determined in accordance with NGR rule 87(2)(b). It also examined whether the ERA had erred in its calculations of various components of the rate of return, including the risk-free rate, market risk premium, and inflation rate. The court further assessed whether the ERA had correctly valued the opening capital base, considering issues such as the measure of inflation used and the classification of certain expenditures. Additionally, the court evaluated the ERA's determination of regulatory expenses and the specification of reference services within the access arrangement.

The court concluded that while the ERA had made some errors, particularly in its calculations and determinations related to the rate of return and regulatory expenses, these did not constitute reviewable errors warranting a quashing of the ERA's decision. The court found that the ERA had acted within its powers and had not made errors of law in its approach to the application of NGR rule 87 or in its determinations regarding the access arrangement. Therefore, the application for judicial review was dismissed, and the ERA's decision remained in place.