Application by EnergyAustralia and Others - [2009] ACompT 8

AUSTRALIAN COMPETITION TRIBUNAL
Application by EnergyAustralia and Others [2009] ACompT 8
COMPETITION LAW – Review of decision of Australian Energy Regulator pursuant to National Electricity Law - merits review – judicial review – consideration of grounds of review - whether exercise of discretion was incorrect – whether decision was unreasonable – scope of separate ground of review of ‘unreasonableness’ – whether a decision under review is ‘unreasonable in all the circumstances’ – circumstances where the Tribunal may remit a matter for determination by the Regulator
EVIDENCE – Tribunal limited to information, documents, material and matters before the Regulator – extent to which the Tribunal may have regard to non ‘review related matter’ – matters to which the Tribunal may have regard
NATIONAL ELECTRICITY LAW – National electricity pricing and revenue regime – application for review of distribution and transmission determinations – distribution and transmission network service providers – assessment of appropriate regulatory control period – whether Regulator reasonably withheld agreement to proposed averaging period – whether decision was made by reference to national electricity objectives and pricing principles
Gas Pipelines Access (South Australia) Act 1997 (SA)
National Electricity Law
National Electricity Rules
Application by East Australian Pipeline Ltd (2005) ATPR 42-047
Application by EnergyAustralia (2009) ACompT 7
Application by Epic Energy South Australia Pty Ltd (2003) ATPR 41-932
Australian Competition and Consumer Commission (ACCC) v Australian Competition Tribunal (2006) 152 FCR 33
East Australian Pipeline Pty Ltd v Australian Competition and Consumer Commission (2007) 233 CLR 229
Minister for Immigration and Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259
File No 2 of 2009

RE:APPLICATION UNDER SECTION 71B OF THE NATIONAL ELECTRICITY LAW FOR A REVIEW OF A DISTRIBUTION DETERMINATION MADE BY THE AUSTRALIAN ENERGY REGULATOR IN RELATION TO ENERGYAUSTRALIA PURSUANT TO CLAUSE 6.11.1 OF APPENDIX 1 OF CHAPTER 11 OF THE NATIONAL ELECTRICITY RULES
BY:ENERGYAUSTRALIA
Applicant
AND:SOUTHERN SYDNEY REGIONAL ORGANISATION OF COUNCILS
Intervener

File No 3 of 2009

RE:APPLICATION UNDER SECTION 71B OF THE NATIONAL ELECTRICITY LAW FOR A REVIEW OF A TRANSMISSION DETERMINATION MADE BY THE AUSTRALIAN ENERGY REGULATOR IN RELATION TO TRANSGRID PURSUANT TO CLAUSE 6A.13.1 OF CHAPTER 6A OF THE NATIONAL ELECTRICITY RULES
BY:TRANSGRID
Applicant

File No 4 of 2009
RE:APPLICATION UNDER SECTION 71B OF THE NATIONAL ELECTRICITY LAW FOR A REVIEW OF A DISTRIBUTION DETERMINATION MADE BY THE AUSTRALIAN ENERGY REGULATOR IN RELATION TO INTERGRAL ENERGY PURSUANT TO CLAUSE 6.11.1 OF APPENDIX 1 OF CHAPTER 11 OF THE NATIONAL ELECTRICITY RULES
BY:INTERGRAL ENERGY
Applicant

File No 5 of 2009

RE:APPLICATION UNDER SECTION 71B OF THE NATIONAL ELECTRICITY LAW FOR A REVIEW OF A TRANSMISSION DETERMINATION MADE BY THE AUSTRALIAN ENERGY REGULATOR IN RELATION TO TRANSEND PURSUANT TO CLAUSE 6A.13.1 OF CHAPTER 6A OF THE NATIONAL ELECTRICITY RULES
BY:TRANSEND
Applicant

AND: NYRSTAR AUSTRALIA PTY LTD
Intervener

File No 6 of 2009

RE:APPLICATION UNDER SECTION 71B OF THE NATIONAL ELECTRICITY LAW FOR A REVIEW OF A DISTRIBUTION/TRANSMISSION DETERMINATION MADE BY THE AUSTRALIAN ENERGY REGULATOR IN RELATION TO COUNTRY ENERGY PURSUANT TO CLAUSE 6.11.1…

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

Case: [2009] ACompT 8
Decision Date: 12 NOVEMBER 2009

CaseChat Overview and Summary

The Australian Competition Tribunal (the Tribunal) was asked to review decisions of the Australian Energy Regulator (the AER) in relation to electricity distribution and transmission services in New South Wales, Tasmania and Victoria. The applicants, EnergyAustralia, TransGrid, Integral Energy, Transend and Country Energy, sought review of the AER's final determinations in respect of distribution and transmission network services for the regulatory period 2009 to 2014. The Tribunal found that the AER unreasonably withheld agreement to the averaging periods proposed by the applicants for the purpose of calculating the nominal risk free rate. The applicants sought a decision by the Tribunal that adopted their revised proposed averaging periods or, as a second preference, their originally proposed averaging periods. The Tribunal found that it saw no special virtue in an averaging period close to the date of the AER's final decision (if indeed February be considered close to the end of April). The Tribunal concluded that the applicants had demonstrated that the AER exercised its discretion incorrectly, or its decision in this respect was unreasonable. The Tribunal found that the AER had erred in reducing the forecast operating expenditure for defect maintenance of new growth assets. The Tribunal found that the AER's approach that more new assets with lower defect rates would necessarily lead to lower defect rates in the next regulatory period ignored what is common ground, namely, that end of life issues will be more significant than has been the case in the past. The Tribunal concluded that the AER was wrong to exclude defect maintenance in respect of new growth assets and to proceed on a basis that the applicant would incur zero defect expenditure in respect of new growth assets. The Tribunal remitted the matter back to the AER to make the decision again.

Orders