Application by SPI Electricity Pty Limited - [2012] ACompT 2

AUSTRALIAN COMPETITION TRIBUNAL
Application by SPI Electricity Pty Limited [2012] ACompT 2

Citation: Application by SPI Electricity Pty Limited [2012] ACompT 2

Review from: Australian Energy Regulator

Parties: SPI ELECTRICITY PTY LIMITED (ABN 91 064 235 776)

File number: ACT 7 of 2010

Tribunal: FOSTER J (DEPUTY PRESIDENT), MR G LATTA AM AND PROFESSOR D ROUND

Date of decision: 6 January 2012

Legislation: National Electricity Law, s 71O(2) and s 71R
National Electricity Rules, cl 6.6.1 and Ch 10, Glossary

Cases cited: Application by United Energy Distribution Pty Limited [2012] ACompT 1 related

Dates of hearing: 6 July 2011

Date of last submissions: 6 July 2011

Place: Sydney

Category: No catchwords

Number of paragraphs: 60

Counsel for SPI Electricity Pty Limited:
Mr D Farrands and Mr A Weinstock

Solicitor for SPI Electricity Pty Limited: SP AusNet

Counsel for the Australian Energy Regulator:
Ms M Sloss SC, Mr S Lloyd SC, Mr P Gray, Mr D Star, Dr V Priskich, Mr T Clarke and Mr L Merrick

Solicitor for the Australian Energy Regulator: Corrs Chambers Westgarth

IN THE AUSTRALIAN COMPETITION TRIBUNAL

NO: ACT 7 of 2010

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 SPI ELECTRICITY PTY LIMITED PURSUANT TO CLAUSE 6.11.1 OF THE NATIONAL ELECTRICITY RULES

BY: SPI ELECTRICITY PTY LIMITED (ABN 91 064 235 776)

TRIBUNAL:

JUSTICE FOSTER (DEPUTY PRESIDENT),
MR G LATTA AM AND PROFESSOR D ROUND

DATE OF ORDER:

6 JANUARY 2012

WHERE MADE:

SYDNEY

THE TRIBUNAL:
1.Orders that, until further order of the Tribunal, the Reasons for Decision accompanying these orders be kept confidential to the applicant and the Australian Energy Regulator and not be disclosed to any person other than officers, employees and duly authorised agents of the applicant and the Australian Energy Regulator and the legal representatives of each of them.
2.Pursuant to s 71P(2)(b) of the National Electricity Law, hereby remits the Final Distribution Determination dated October 2010 in respect of the 2011–2015 regulatory control period in relation to the applicant (SPI Electricity Pty Limited) to be made in accordance with the National Electricty Law, the National Electricity Rules and these Reasons for Decision.

IN THE AUSTRALIAN COMPETITION TRIBUNAL

NO: ACT 7 OF 2010

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 SPI ELECTRICITY PTY LIMITED PURSUANT TO CLAUSE 6.11.1 OF THE NATIONAL ELECTRICITY RULES

BY: SPI ELECTRICITY PTY LIMITED (ABN 91 064 235 776)

TRIBUNAL:

FOSTER J (DEPUTY PRESIDENT),
MR G LATTA AM AND PROFESSOR D ROUND

DATE:

6 JANUARY 2012

PLACE:

SYDNEY

REASONS FOR DECISION

At [533] of the principal Reasons for Decision (Application by United Energy Distribution Pty Limited [2012] ACompT 1), we said:
This issue [referring to the insurance event issue] concerns whether the reworked definition of “insurance event” in the final decision which included a rider…

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: [2012] ACompT 2
Decision Date: 6 January 2012

CaseChat Overview and Summary

SPI Electricity Pty Limited sought a review of the Australian Energy Regulator's (AER) determination concerning the insurance pass through event for the 2011-2015 regulatory control period. The primary legal issue before the Australian Competition Tribunal was whether the AER's definition of the insurance pass through event was correct, unreasonable, or based on errors of fact, and if there was any procedural unfairness in the process. SPI argued that the AER's definition improperly excluded costs incurred from events that occurred in a prior period but resulted in losses in the current regulatory period. The AER contended that its definition was necessary to prevent double recovery by the distributor and was not procedurally unfair.

The Tribunal found that the AER's definition of the insurance pass through event was an exercise of discretion and not mandated by law. It held that the AER had not provided procedural fairness by not notifying SPI of the precise wording of the definition of the insurance pass through event before including it in the final decision. The Tribunal set aside the AER's definition and remitted the matter back to the AER for reconsideration, with a direction to provide SPI with the proposed definition and an opportunity to comment.

The Tribunal's decision did not address the merits of the AER's discretionary decision but emphasized that the National Electricity Law and Rules did not require that the occurrence of the event and the suffering of the loss both occur within the same regulatory control period. The Tribunal's decision focused on procedural fairness and the need for the AER to provide SPI with a reasonable opportunity to comment on the definition of the insurance pass through event before its inclusion in the final decision.

Orders