Application by Epic Energy South Australia Pty Ltd - [2003] ACompT 5

AUSTRALIAN COMPETITION TRIBUNAL

Application by Epic Energy South Australia Pty Ltd

[2003] ACompT 5

TRADE PRACTICES - access to pipelines - review of decision of Australian Competition and Consumer Commission to draft access arrangement - whether decision reasonable - calculation of optimised replacement cost - whether covered pipeline - Moomba to Adelaide Pipeline System - Gas Pipelines Access (South Australia) Act 1997 (SA)

Gas Pipelines Access (South Australia) Act 1977 (SA)

Application by Epic Energy South Australia Pty Ltd [2002] AcompT 4 followed

Associate Provincial Picture Houses Ltd v Wednesdbury Corporation [1948] 1 KB 223 applied

House v The King (1936) 55 CLR 499 applied

Duke Eastern Gas Pipeline Pty Ltd [2001] ACompT 2 followed

APPLICATION BY EPIC ENERGY SOUTH AUSTRALIA PTY LTD

File No 6 of 2002

JUSTICE COOPER, PROFESSOR D K ROUND AND MISS M M STARRS

BRISBANE (HEARD IN ADELAIDE)

10 DECEMBER 2003

IN THE AUSTRALIAN COMPETITION TRIBUNAL

Matter No 6 of 2002

RE:

APPLICATION UNDER SECTION 38 AND/OR SECTION 39 OF THE GAS PIPELINES ACCESS (SOUTH AUSTRALIA) LAW FOR REVIEW OF THE DECISION BY THE AUSTRALIAN COMPETITION AND CONSUMER COMMISSION MADE ON 31 JULY 2002 TO DRAFT AND APPROVE AN ACCESS ARRANGEMENT FOR THE MOOMBA TO ADELAIDE PIPELINE SYSTEM UNDER SECTION 2.20(a) OF THE NATIONAL THIRD PARTY ACCESS CODE FOR NATURAL GAS PIPELINE SYSTEMS

BY:

EPIC ENERGY SOUTH AUSTRALIA PTY LTD

TRIBUNAL:

JUSTICE R E COOPER (DEPUTY PRESIDENT)

PROFESSOR D K ROUND

MISS M M STARRS

DATE:

10 DECEMBER 2003

WHERE MADE:

BRISBANE (HEARD IN ADELAIDE)

THE TRIBUNAL ORDERS THAT:

1. The decision of the Australian Competition and Consumer Commission made on 31 July 2002 to approve an Access Arrangement pursuant to s 2.20(a) of the National Third Party Access Code for National Gas Pipeline Systems in respect of the Moomba to Adelaide Pipeline System (‘the Decision’) be varied.

2.         The Decision be varied in the following manner:
(a)        An exchange rate adjusted cost of line pipe of $1 302.20 per tonne be used to calculate the Optimised Replacement Cost of the existing pipeline for the purpose of determining the initial Capital Base in valuing the Moomba to Adelaide Pipeline System (‘MAPS’) as a Covered Pipeline.
(b)        The expansion of capacity of the MAPS by 25 terajoules per day to satisfy the requirements of the operator of the Pelican Point Power Station be excluded from the System Primary Capacity (‘the SPC’) calculation and that the SPC of the MAPS for the purpose of the approved Access Arrangement be 323 terajoules per day.
(c)        All necessary and consequential amendments be made to give effect to such variations in terms of the amendments contained in ‘Scenario 2’ of the document ‘Statement of Amendments Required to Access Arrangement’.

IN THE AUSTRALIAN COMPETITION TRIBUNAL

Matter No 6 of 2002

RE:

APPLICATION UNDER SECTION 38 AND/OR SECTION 39 OF THE GAS PIPELINES ACCESS (SOUTH AUSTRALIA) LAW FOR REVIEW OF THE DECISION BY THE AUSTRALIAN COMPETITION AND CONSUMER COMMISSION MADE ON 31 JULY 2002 TO DRAFT AND APPROVE AN ACCESS ARRANGEMENT FOR…

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: [2003] ACompT 5
Decision Date: 10 DECEMBER 2003

CaseChat Overview and Summary

The Australian Competition Tribunal was asked to review the decision of the Australian Competition and Consumer Commission (ACCC) to draft and approve an access arrangement for the Moomba to Adelaide Pipeline System. The applicant, Epic Energy South Australia Pty Ltd, argued that the ACCC's decision to draft and approve an access arrangement for the Moomba to Adelaide Pipeline System was unreasonable. The Tribunal found that the ACCC had erred in its determination of the initial capital base and system primary capacity. The Tribunal found that the ACCC had used an unreasonable methodology to estimate the cost of line pipe, which resulted in an underestimation of the initial capital base. The Tribunal also found that the ACCC had unreasonably included the Pelican Point expansion in the system primary capacity. The Tribunal ordered that the access arrangement be varied to reflect the Tribunal's findings. The Tribunal ordered that the initial capital base be recalculated using an exchange rate adjusted cost of line pipe of $1,302.20 per tonne, and that the system primary capacity be reduced by 25 terajoules per day.

Orders