National Gas Access (WA) (Local Provisions) Regulations 2009

Small use customer is defined in regulation 4 as an end user to whom gas is delivered at a delivery point, who receives less than 1 terajoule of gas at that delivery point in any year, and who is not a user. This threshold is important because it determines which customers benefit from the uniform tariff requirement: only those consuming under 1 TJ per year. That threshold likely captures most residential and small commercial customers but excludes large industrial users. Small delivery point means a point on a distribution pipeline at which gas is delivered to a user for delivery by that user to a small use customer; small delivery service means a reference service to the extent used for delivery to a small delivery point. Delivery point is defined as a point on a distribution pipeline at which gas is withdrawn and delivered to an end user, a broader concept that underpins the small use threshold. Reference tariff variation mechanism is given the meaning in rule 92 of the National Gas Rules, which governs how tariffs can change over time. Tariff area is defined by cross reference to the Energy Coordination (Gas Tariffs) Regulations 2000 regulation 4(1), which identifies three areas: the Albany area, the Kalgoorlie Boulder area, and the Mid West/South West area. The uniform tariff requirement applies within each tariff area separately, so tariffs can differ between areas, but within an area all small use customers must face the same reference tariff regardless of where their delivery point is located. The neighbouring access arrangement concept ensures that if a single pipeline operator has multiple distribution pipelines within the same tariff area, the small delivery service tariff must be identical across all of them. Standing charge (regulation 9) is a quarterly charge payable by the service provider of a covered pipeline during any part of the quarter when the pipeline is both specified in Schedule 1 and is a covered pipeline. The amount is calculated using the formula S = C × P × (DQ/DP), where C is core function costs for the quarter, P is the percentage from Schedule 1, DQ is the total days in the quarter, and DP is the days the pipeline qualifies and the person is the service provider. Core function costs are costs incurred in connection with the WA arbitrator's functions under the national gas scheme laws that cannot be recovered under the National Gas Access (WA) (Part 3) Regulations 2009 regulation 9. The prescribed rate of interest is BBSW (Bank Bill Reference Rate, mid rate, one month) plus 5 percentage points, calculated daily, a significant penalty rate intended to deter late payment.

The regulations directly affect four categories of actors. First, pipeline operators who own or operate distribution pipelines in Western Australia are directly bound. Those whose pipelines are specified in Schedule 1 (the Mid West and South West Gas Distribution System, Dampier to Bunbury Natural Gas Pipeline, Goldfields Gas Pipeline, and Kalgoorlie to Kambalda Pipeline) must pay quarterly standing charges to fund the WA arbitrator. More broadly, any operator of a distribution pipeline (not just those in Schedule 1) that is subject to an access arrangement for small delivery services is affected by Part 2, because the uniform tariff requirement applies to all distribution pipelines (regulation 5 confirms Part 2 applies only to distribution pipelines). Operators must ensure their access arrangements comply with the uniform tariff and neighbouring arrangement rules, or the ERA will not approve them. Second, the Economic Regulation Authority (ERA) is the primary regulator constrained by these regulations. It must not approve or make an access arrangement that violates regulation 6, and it must consider the impact on small use customers and retailers under regulation 7. The ERA also has the administrative duty under Part 3 to assess standing charges, issue notices, and recover unpaid amounts with interest. Third, retailers (users who deliver gas to small use customers) are affected indirectly because the uniform tariff and the mandatory consideration of impact on retailers (regulation 7(1)(a)) affect the prices they can charge and their margins. Retailers cannot negotiate location specific delivery tariffs, so they bear the costs of uniform pricing that may not reflect actual delivery costs. Fourth, small use customers (end users consuming under 1 TJ per year) are intended beneficiaries, but they face the cross subsidy consequences noted below. The WA arbitrator is also affected as the recipient of standing charges and must report them annually. The regulations apply only to distribution pipelines, not transmission pipelines. The territorial scope is Western Australia, with tariff areas defined by reference to specific regions: Albany, Kalgoorlie Boulder, and Mid West/South West. The regulations commenced on 1 January 2010.

Duty of ERA (negative obligation): The ERA must not approve or make an access arrangement for a distribution pipeline if the reference tariff for any small delivery service varies according to geographical location of the small delivery point (regulation 6(1)). This is a flat prohibition with no exceptions. Duty of ERA (positive obligation): The ERA must not approve an access arrangement unless the reference tariff for any small delivery service is the same as the reference tariff for the equivalent service in any neighbouring access arrangement (regulation 6(2)). The definition of neighbouring access arrangement (regulation 6(3)) requires the arrangements be for pipelines operated by the same pipeline operator, within the same tariff area, that are not themselves being revised or varied by the arrangement in question. Duty of ERA (consideration obligation): When exercising a discretion in approving or making an access arrangement for a distribution pipeline, the ERA must take into account the possible impact of proposed reference tariffs, the method of determining tariffs, and the reference tariff variation mechanisms on (a) users to whom gas is or might be delivered via small delivery service, and (b) small use customers to whom gas is or might be delivered by those users (regulation 7(1)). The impact on retailers is specifically included. The term "impact" is not limited to economic impact (regulation 7(2)), so the ERA must consider social or other non economic factors. This requirement operates despite anything in the National Gas Law or Rules that would otherwise prevent the matter being taken into account (regulation 7(3)). However, regulation 7(4) clarifies that the ERA is not permitted to approve an access arrangement that does not include a reference tariff variation mechanism compliant with rule 92 of the Rules, so the NGR rule remains a floor. Duty of Service Providers: Any person who is the service provider of a covered pipeline specified in Schedule 1 during a quarter must pay a standing charge (regulation 9(1), (2)). The amount is calculated by the formula incorporating core function costs, the pipeline's percentage, and the proportion of days in the quarter the pipeline was covered and the person was service provider (regulation 9(3)). Duty to pay: The service provider must pay the assessment amount within 30 days after the day specified in the notice of assessment (regulation 10(2)). If not paid in full within the allowed period, interest at BBSW plus 5% per day accrues (regulation 10(3)). Right of recovery: The WA arbitrator may recover unpaid assessment amounts and interest as a debt due in a court of competent jurisdiction (regulation 11(1)). The arbitrator's signed certificate is sufficient evidence of the matters specified (regulation 11(2)). Right to report: The WA arbitrator's annual report under the Financial Management Act 2006 must include details of the total amount of standing charges for each person for the relevant financial year (regulation 12). Service providers have a right to receive a notice of assessment specifying the amount, core function costs, and date of issue (regulation 10(1)(b)). There is no express right for service providers to challenge the assessment otherwise than by not paying and forcing recovery proceedings. Small use customers have no direct rights under these regulations; their protection comes through the ERA's obligations.

The regulations do not create criminal offences or civil penalties for non compliance with the uniform tariff requirements in Part 2. Enforcement of the tariff rules is structural rather than punitive: the ERA must not approve or make an access arrangement that violates regulation 6(1) or (2). If a pipeline operator proposes an access arrangement with geographically varying tariffs or with tariffs differing from a neighbouring arrangement, the ERA must refuse approval. This effectively prevents the offending tariff from coming into effect. The operator would have to submit a compliant arrangement or seek a judicial review if it believes the ERA's refusal is wrong. For the consideration obligation under regulation 7, enforcement is through administrative law: if the ERA fails to take the required impacts into account, a decision can be challenged on the ground that it took into account an irrelevant consideration or failed to take into account a relevant one. The regulations do not specify any penalty for the ERA itself. In contrast, Part 3 contains a clear enforcement machinery for standing charges. If a service provider fails to pay the assessment amount in full within 30 days of the notice, interest accrues at the prescribed rate (BBSW one month plus 5 percentage points, calculated daily) from the first day after the allowed period (regulation 10(3), definition of "prescribed rate" in regulation 8). This is a high penalty rate: BBSW in normal conditions is low, so 5% above BBSW is roughly 10-12% per annum, but daily compounding accelerates the cost. The WA arbitrator can recover any unpaid assessment amount plus interest in a court of competent jurisdiction as a debt due (regulation 11(1)). The evidentiary provisions are generous to the arbitrator: a certificate signed by the arbitrator specifying the assessment amount, interest, the person liable, and stating the amounts are unpaid is sufficient evidence without proof of the arbitrator's appointment or the signature's authenticity (regulation 11(2)). This shifts the burden to the service provider to disprove the debt. There is no limitation period stated for recovery actions, so general statutes of limitations would apply. The requirement to report standing charges in the annual report (regulation 12) provides transparency but is not itself a penalty. There is no explicit provision for disputes about the amount of core function costs or the calculation of standing charges; a service provider could refuse to pay and raise defences in debt proceedings, but the certificate provision makes that difficult. Overall, the enforcement machinery is light on Part 2 (relying on the ERA's gatekeeper role) and heavy on Part 3 (with high interest and streamlined debt recovery).

These regulations are made under the National Gas Access (WA) Act 2009, which applied the National Gas Law and National Gas Rules as laws of Western Australia. The regulations expressly override the National Gas Law and Rules in two key respects. Regulation 6(4) states that regulation 6 applies despite anything in the National Gas Law or Rules to the contrary. This means that even if the national framework would permit geographically differentiated tariffs or different tariffs between pipelines operated by the same operator within a tariff area, the WA local provisions prohibit it. Regulation 7(3) similarly states that the requirement to take into account impact on small use customers and retailers applies despite anything in the National Gas Law or Rules that would otherwise prevent the matter being taken into account. This overrides any provision in the national regime that might limit the ERA's discretion to consider non economic impacts. However, regulation 7(4) clarifies that the ERA still cannot approve an access arrangement that lacks a reference tariff variation mechanism compliant with rule 92 of the Rules, so the national rule remains a floor. The regulations also interact with the Energy Coordination (Gas Tariffs) Regulations 2000, which define the tariff areas for the purposes of regulation 4. Those areas are Albany, Kalgoorlie Boulder, and Mid West/South West areas as defined in that instrument. Changes to those definitions would directly affect the scope of the uniform tariff requirement. For Part 3, the regulations interact with the Financial Management Act 2006, which requires the WA arbitrator to submit an annual report containing details of standing charges (regulation 12). The "national gas scheme laws" defined in regulation 8 include the National Gas Law, the National Gas Rules, the National Gas Access (Western Australia) Regulations, and the National Gas Access (WA) Act 2009 and its regulations. The standing charge recovers core function costs incurred under those laws that cannot be recovered under a different regulation (the National Gas Access (WA) (Part 3) Regulations 2009 regulation 9). This avoids double recovery. The pipelines listed in Schedule 1 are identified by licence numbers under two other statutes: the Mid West and South West Gas Distribution System is under a distribution licence under the Energy Coordination Act 1994 (WA:GDL8), while the Dampier to Bunbury pipeline, Goldfields Gas Pipeline, and Kalgoorlie to Kambalda Pipeline are under pipeline licences under the Petroleum Pipelines Act 1969 (WA:PL40, WA:PL24, WA:PL27). This means the regulations apply based on licensing frameworks under different Acts. Part 2 applies only to distribution pipelines (regulation 5), so transmission pipelines are not subject to the uniform tariff rules. However, some of the Schedule 1 pipelines (the Dampier to Bunbury pipeline is primarily a transmission pipeline) are subject to Part 3 standing charges regardless of classification. There is no express interaction with the Competition and Consumer Act 2010 (Cth) or the National Electricity Law, although the ERA's decisions under the regulations could have indirect effects on competition in gas retail markets.

The regulations are a compilation as at the date shown in the compilation table. The National Gas Access (WA) (Local Provisions) Regulations 2009 were gazetted on 31 December 2009 (pages 5331-5341) and commenced on 1 January 2010 (see regulation 2, which ties commencement to the coming into operation of section 21 of the National Gas Access (WA) Act 2009, which occurred by gazettal on 31 December 2009 page 5327). The compilation table shows only one entry: the original regulations made in 2009. There are no amendments listed. The regulations have therefore remained unchanged since commencement. This absence of amendment history is significant. It means the uniform tariff requirement and the standing charge percentages have been static since 2010. The percentages in Schedule 1 (27.01%, 50%, 20.27%, 2.72%) were set at commencement and have never been adjusted. Since the standing charge formula uses fixed percentages of core function costs, any change in the relative cost allocation among pipelines would require an amendment. Similarly, the definition of tariff area by reference to the Energy Coordination (Gas Tariffs) Regulations 2000 could have been amended indirectly if those underlying regulations changed, but the compilation does not reflect any cross instrument amendment. The transitional provision in regulation 13 (defining quarter to include the period from commencement to 31 December 2009) has operative effect only for that initial quarter and is now spent. The regulations do not contain a sunset clause, review provision, or expiry date. They remain in force indefinitely unless repealed or amended. The compilation notes at the end provide a defined terms list, which is not part of the law, and a compilation table showing the single citation. There is no history of reprints or amendments beyond the original. The absence of amendment suggests either the regulations are not considered controversial, or the political cost of amending them is high. The standing charge percentages may now be outdated if the relative significance of the pipelines has changed, but no amendment has been made.

The regulations themselves do not reference any litigation, and no cases are named in the source. Because the regulations are WA subordinate legislation with limited scope, there is no publicly recorded litigation history within the text. However, the uniform tariff requirement in Part 2 raises potential litigable issues. A pipeline operator could challenge an ERA decision refusing to approve an access arrangement on grounds that the uniform tariff requirement is ultra vires the enabling Act or imposes an effective taking of property without compensation. Alternatively, a operator facing a standing charge assessment could dispute the calculation of core function costs or challenge the validity of the certificate evidence provisions. The high interest rate (BBSW plus 5%) might be argued as a penalty unenforceable in debt proceedings. The regulations also interact with the National Gas Law, which has its own judicial review regime under the Commercial Arbitration Act? Actually the NGL is applied as WA law; a challenge could be brought in the WA Supreme Court. The definition of "neighbouring access arrangement" could be litigated over what constitutes the "same tariff area" or "same pipeline operator". The "fixed percentage" formula for standing charges could be argued to be a tax that must be authorised by statute, not subordinate legislation. The certificate of evidence provision (regulation 11(2)) might be challenged as reversing the onus of proof or denying natural justice. None of these arguments are recorded in the source, so they remain hypothetical. The compilation table shows no amendment reflecting any court decision. The regulations are likely not heavily litigated because they affect a small number of large pipeline operators who may prefer compliance to litigation, given the amounts at stake are relatively modest compared to the value of pipeline assets. The lack of litigation history also means no judicial interpretation of key terms like "impact" (including non economic) or "neighbouring access arrangement" exists. If litigation were to occur, a court would have to give meaning to these terms without precedent. The legislature's failure to define "impact" more precisely creates litigation risk. The uniform tariff requirement's override clause (regulation 6(4): "despite anything in the National Gas Law or Rules to the contrary") would be tested if it conflicted with a mandatory pricing principle in the National Gas Rules. These are open questions currently unresolved.

Uniform tariff cross subsidy. Regulation 6(1) prohibits geographical variation in reference tariffs for small delivery services. This necessarily creates cross subsidies from low cost customers (those close to transmission lines or with dense delivery networks) to high cost customers (remote areas or low density areas). Small use customers in cheaper areas pay more than cost reflective tariffs, while those in expensive areas pay less. This distorts price signals and may discourage efficient investment in new distribution capacity. The ERA must ignore cost differences when approving tariffs. Retailers are also affected: they cannot offer discounts based on actual delivery costs, reducing competition.

Non economic impact consideration. Regulation 7(2) provides that "impact" is not limited to economic impact. The ERA must therefore consider social, environmental, or other intangibles when assessing tariffs. This introduces substantial uncertainty into the access arrangement process. No guidance is given on how to weigh these factors against the usual economic efficiency objectives of the National Gas Law. A decision based on non economic factors could be vulnerable to judicial review for unreasonableness, but the ERA has broad discretion. This could be used as a tool to impose tariffs that favour certain customer groups regardless of cost.

Override clauses create legal conflict. Regulation 6(4) and 7(3) expressly override the National Gas Law and Rules. If the national regime contains mandatory pricing rules (e.g., cost reflection requirements or ring fencing provisions), the WA regulations prevail. This creates two tiers of regulation within the national gas access framework. Operators dealing with multiple jurisdictions need to maintain compliance with both. The override may also raise constitutional issues about inconsistency with the national scheme, although the Act applies the NGL as a WA law, so the local provisions validly modify it.

Standing charge formula ambiguity. The formula in regulation 9(3) uses S = C × P × (DQ/DP). This is likely a misprint: the fraction should be DP/DQ. As written, if DP is less than DQ (part year ownership), multiplying by DQ/DP increases the charge above full year. That cannot be the intended effect. The correct interpretation is probably S = C × P × (DP/DQ), so charge is pro rated for partial quarter service. The user should treat this as a drafting error and seek advice. The ambiguity creates enforcement risk.

No adjustment mechanism for percentages. Schedule 1 percentages are fixed. If a pipeline's share of core function costs changes, there is no mechanism for the WA arbitrator to reallocate them. The regulations do not provide for amendment by regulation later. This may become unfair or inadequate over time.

Interest accrues from day after allowed period. The prescribed rate uses BBSW from the first day after the allowed period. If the allowed period ends on a non business day, the rate on the previous business day might not be quoted. The backstop provision (paragraph (b) of the definition) allows the WA arbitrator to determine the rate having regard to comparable indices. This discretion could be exercised arbitrarily.

Certificate evidence provision shifts burden. Regulation 11(2) makes the WA arbitrator's signed certificate sufficient evidence of the debt without proof of appointment or signature authenticity. The service provider then bears the burden of disproving the debt. This may be procedurally unfair if the assessment is wrong but the provider cannot easily rebut the certificate. The provision also circumvents ordinary evidence rules.

No sunset clause. The regulations have no review date. They remain in force indefinitely even if circumstances change. The uniform tariff requirement cannot be adjusted via ERA discretion; it requires legislative amendment.

Definition of small use customer excludes users. Small use customers must not be "users" (retailers). This means a user who consumes under 1 TJ but also acts as a retailer for others is not a small use customer for its own consumption. The protection applies only to end users who are not also supplying gas to others. This narrows the class of beneficiaries.

Compliance by pipeline operators with access arrangement obligations. Any operator of a distribution pipeline in Western Australia that supplies small delivery services must ensure its access arrangement does not contain reference tariffs that vary by geographical location within the same tariff area (regulation 6(1)). The operator must check that the reference tariffs for small delivery services are identical across all small delivery points served by the pipeline within each tariff area. Additionally, the operator must ensure that the reference tariff for each small delivery service is the same as the reference tariff for the equivalent service in any neighbouring access arrangement operated by the same operator in the same tariff area (regulation 6(2)). An operator that is the sole operator in a tariff area need only ensure internal uniformity. An operator with multiple distribution pipelines in the same tariff area (e.g., in the Mid West/South West area) must harmonise tariffs across those pipelines. The operator should document which tariff area each delivery point falls into using the definitions from the Energy Coordination (Gas Tariffs) Regulations 2000. When proposing an access arrangement to the ERA, the operator must also provide information demonstrating that the ERA has taken into account the possible impact on users (retailers) and small use customers, including non economic impacts (regulation 7). The operator should prepare an impact statement covering economic effects (price, affordability) and non economic effects (access to supply, regional equity, environmental outcomes). If the ERA requests additional information, the operator should cooperate. The operator must also ensure the access arrangement includes a reference tariff variation mechanism complying with rule 92 of the National Gas Rules, despite the broader override provisions (regulation 7(4)). Compliance with standing charge obligations. Any person who is the service provider of a pipeline specified in Schedule 1 must pay quarterly standing charges. The operator should identify whether its pipeline is listed in Schedule 1 and whether it is a covered pipeline. The four listed pipelines are: Mid West and South West Gas Distribution System (27.01%), Dampier to Bunbury Natural Gas Pipeline (50%), Goldfields Gas Pipeline (20.27%), and Kalgoorlie to Kambalda Pipeline (2.72%). If the operator acquires or sells a pipeline partway through a quarter, the charge is apportioned based on days of ownership (regulation 9(3) formula, noting the likely drafting error discussed in Gotchas). The operator should maintain records of the days it was the service provider. The WA arbitrator will issue a notice of assessment after each quarter specifying the amount due, core function costs, and the issue date. The operator must pay the full assessment amount within 30 days of that date (regulation 10(2)). If the operator believes the assessment is incorrect, it should still pay under protest and seek a refund or judicial review, because non payment attracts high interest and streamlined debt recovery. The operator should also monitor the BBSW rate to verify interest calculations if late. The operator should maintain records of standing charge payments for reporting and audit purposes. Compliance by the ERA. The ERA must ensure its access arrangement decisions comply with regulation 6 and 7. It should develop internal processes to check geographical uniformity and neighbouring arrangement consistency. It should also systematically consider and document the impact on users and small use customers, including non economic impacts, as part of each access arrangement determination. For standing charges, the ERA (or WA arbitrator) must assess and issue notices within a reasonable time after each quarter, include the mandatory content, and report amounts in the annual report. The arbitrator should also maintain a record of standing charges by person for the annual report under regulation 12. **No specific compliance timelines beyond the 30 day payment window and the quarterly assessment cycle. The regulations do not impose a periodic compliance reporting requirement on operators, only the obligation to pay when assessed.