PIAC submission to the AEMC Review into the scope of economic regulation applied to covered pipelines Issues Paper

PIAC responded to an AEMC issues paper discussing gas pipeline regulation. The operation of the east coast gas market is notoriously opaque. This opacity means it is often very difficult for users to negotiate fair access to pipelines, often resulting in inefficient investment in and operation of the gas system. This inefficiency has the potential to increase prices for the consumers that PIAC represents.

 

PIAC recommended that the AEMC approach the review with a view not only to the interests of direct pipeline users but also to the end consumers of gas. PIAC also advocated for a variety of specific reforms including:

• Amending the regulatory coverage test to address the market power of monopoly pipelines;
• Amending the definition of regulated reference services to address the contestability of services;
• Giving the AER more power over a wider range of regulatory decisions; and 
• Limiting the ability to apply light regulation to distribution pipelines.