Div 1National gas objective

Division 1—National gas objective 23—National gas objective The objective of this Law is to promote efficient investment in, and efficient operation and use of, covered gas services for the long term interests of consumers of covered gas with respect to— (a) price, quality, safety, reliability and security of supply of covered gas; and (b) the achievement of targets set by a participating jurisdiction— (i) for reducing Australia's greenhouse gas emissions; or (ii) that are likely to contribute to reducing Australia's greenhouse gas emissions. The AEMC must publish targets in a targets statement: see section 72A. 23A—Regulations may prescribe matters for national gas objective Without limiting Part 3 of the National Gas (South Australia) Act 2008 of South Australia, the Regulations may make provision about a matter relating to the achievement of targets mentioned in section 23(b) of this Law. Division 2—Revenue and pricing principles relating to scheme pipelines 24—Revenue and pricing principles relating to scheme pipelines (1) The revenue and pricing principles that apply in relation to a pipeline service provided by means of a scheme pipeline are the principles set out in subsections (2) to (7). (2) A scheme pipeline service provider should be provided with a reasonable opportunity to recover at least the efficient costs the service provider incurs in— (a) providing reference services; and (b) complying with a regulatory obligation or requirement or making a regulatory payment. (3) A scheme pipeline service provider should be provided with effective incentives in order to promote economic efficiency with respect to reference services the service provider provides. The economic efficiency that should be promoted includes— (a) efficient investment in, or in connection with, a pipeline with which the service provider provides reference services; and (b) the efficient provision of pipeline services; and (c) the efficient use of the pipeline. (4) Regard should be had to the capital base with respect to a pipeline adopted— (a) in any previous— (i) access arrangement decision; or (ii) decision of a relevant Regulator under section 2 of the Gas Code; (b) in the Rules. (5) A reference tariff should allow for a return commensurate with the regulatory and commercial risks involved in providing the reference service to which that tariff relates. (6) Regard should be had to the economic costs and risks of the potential for under and over investment by a scheme pipeline service provider in a pipeline with which the service provider provides pipeline services. (7) Regard should be had to the economic costs and risks of the potential for under and over utilisation of a pipeline with which a scheme pipeline service provider provides pipeline services. Division 2A—Innovative trial principles 24A—Innovative trial principles The following principles (the innovative trial principles) must be taken into account in determining whether a trial project is genuinely innovative in connection with granting a trial waiver or making a trial Rule relating to a trial project: (a) whether the trial project is focused on developing new or materially improved covered gas services; (b) whether the trial project is likely to contribute to the achievement of the national gas objective; (c) whether the trial project is able to demonstrate a reasonable prospect of giving rise to materially improved services and outcomes for consumers of covered gas; (d) whether the trial project maintains adequate consumer protections, including whether the trial project may involve risks to consumers and (if so), how those risks might be mitigated; (e) whether the trial project is unable to proceed under the existing regulatory framework; (f) whether the trial project has moved beyond research and development stages but is not yet established, or of sufficient maturity, size or otherwise commercially ready, to attract investment; (g) whether the trial project may negatively impact AEMO's operation of systems relating to covered gas (including AEMO's performance of its declared system functions), and markets and auctions for covered gas and, if there are impacts, how those impacts can be mitigated; (h) whether the trial project may impact on competition in a competitive sector of a market for covered gas; (ha) whether the licences, authorisations and consents required for the trial project under jurisdictional gas legislation have been obtained or will be obtained; (i) any other principle prescribed by the Regulations. Division 3—MCE policy principles 25—MCE statements of policy principles (1) Subject to this section, the MCE may issue a statement of policy principles in relation to any matters that are relevant to the exercise and performance by the AEMC of its functions and powers in— (a) making a Rule; or (b) conducting a review under section 83. (2) Before issuing a statement of policy principles, the MCE must be satisfied that the statement is consistent with the national gas objective. (3) As soon as practicable after issuing a statement of policy principles, the MCE must give a copy of the statement to the AEMC. (4) The AEMC must publish the statement in the South Australian Government Gazette and on its website as soon as practicable after it is given a copy of the statement. Part 4—Operation and effect of National Gas Rules 26—National Gas Rules to have force of law The National Gas Rules have the force of law in this jurisdiction. Part 5—Corporations Act displacement 26A—Corporations Act displacement (1) The Regulations may declare a relevant provision to be a Corporations legislation displacement provision for the purposes of section 5G of the Corporations Act 2001 of the Commonwealth in relation to the provisions of Chapter 5 of that Act. relevant provision means a provision of the Rules that relates to any of the following: (a) the functions of the AEMO under procedures relating to defaults by retailers; (b) the application (or drawing on) of credit support held by a distributor in respect of a retailer who is the subject of a RoLR event within the meaning of Part 6 of the National Energy Retail Law. Chapter 2—Functions and powers of gas market regulatory entities Part 1—Functions and powers of the Australian Energy Regulator 27—Functions and powers of the AER (1) The AER has the following functions and powers: (a) to monitor compliance by persons (including AEMO) with this Law, the Regulations and the Rules, including compliance with an applicable access arrangement, an access determination and a ring fencing decision; and (b) to investigate breaches or possible breaches of provisions of this Law, the Regulations or the Rules, including offences against this Law; and (ba) without limiting paragraphs (a) and (b), in relation to a person undertaking a trial project under a trial Rule or trial waiver, to monitor the conduct and outcomes of the trial project and investigate breaches or possible breaches by the person of— (i) this Law, the Regulations and the Rules; and (ii) in particular— (A) in the case of a person undertaking a trial project under a trial Rule—the trial Rule and any requirements imposed by the AEMC under section 314B; and (B) in the case of a person undertaking a trial project under a trial waiver—the trial waiver and any conditions to which the trial waiver is subject; and (c) to institute and conduct proceedings in relation to breaches of provisions of this Law, the Regulations or the Rules, including offences against this Law; and (d) to institute and conduct appeals from decisions in proceedings referred to in paragraph (c); and (daa) to make— (i) scheme pipeline determinations; and (ii) scheme pipeline revocation determinations; and (iii) greenfields incentive determinations; and (iv) greenfields price protection determinations; and (dab) to monitor service providers' behaviour in relation to particular matters, including, for example, the prices charged by service providers for pipeline services; and (da) to make a rate of return instrument; and (e) AER economic regulatory functions or powers; and (ea) to make and amend the Operational Transportation Service Code in accordance with this Law and the Rules; and (eb) the AER trial waiver functions; and (f) to prepare and publish reports on the financial and operational performance of service providers in providing pipeline services by means of scheme pipelines; and (fa) in relation to goods or services in the covered gas industry— (i) to prepare and publish, in accordance with the Rules, aggregated and anonymised information or data about prices for those goods or services; and (ii) other monitoring, analysing or reporting functions that relate to prices for those goods or services conferred on the AER by this Law or the Rules; and (iii) for the purposes of subparagraph (i) or (ii)—to collect and analyse information or data about prices from sources determined by the AER or specified in the Rules; and (g) to approve compliance programs of service providers relating to compliance by service providers with this Law or the Rules; and (ga) AER wholesale market monitoring functions and AER wholesale market reporting functions; and (h) any other functions and powers conferred on it under this Law or the Rules. (1a) The AER has the following functions and powers in relation to the Procedures: (a) to investigate breaches or possible breaches of the Procedures referred to the AER by AEMO; and (b) to institute and conduct proceedings in relation to breaches of the Procedures referred to the AER by AEMO; and (c) to institute and conduct appeals from decisions in proceedings referred to in paragraph (b); and (d) to approve, in consultation with AEMO, compliance programs relating to compliance by Registered participants with the Procedures. (2) The AER has the power to do all things necessary or convenient to be done for or in connection with the performance of its functions. 28—Manner in which AER must perform or exercise AER economic regulatory functions or powers (1) The AER must, in performing or exercising an AER economic regulatory function or power— (a) perform or exercise that function or power in a manner that will or is likely to contribute to the achievement of the national gas objective; and (b) if the AER is making a designated regulatory decision— (i) ensure that— (A) the scheme pipeline service provider that provides the pipeline services to which the applicable access arrangement decision will apply; and (B) users or prospective users of the pipeline services that the AER considers have an interest in the matter; and (C) any user or consumer associations or user or consumer interest groups that the AER considers have an interest in the matter, are, in accordance with the Rules— (D) informed of the material issues under consideration by the AER; and (E) given a reasonable opportunity to make submissions in respect of the decision before it is made; and (ii) specify— (A) the manner in which the constituent components of the decision relate to each other; and (B) the manner in which that interrelationship has been taken into account in the making of the decision. (2) In addition, the AER— (a) must take into account the revenue and pricing principles— (i) when exercising a discretion in approving or making those parts of an access arrangement relating to a reference tariff; or (ii) when making an access determination relating to a rate or charge for a pipeline service; and (b) may take into account the revenue and pricing principles when performing or exercising any other AER economic regulatory function or power, if the AER considers it appropriate to do so. (3) For the purposes of subsection (2)(a)(ii), a reference to a "reference service" in the revenue and pricing principles must be read as a reference to a "pipeline service". user or consumer association means an association or body (whether incorporated or unincorporated)— (a) the members of which include more than 1 user, prospective user or end user; and (b) that represents and promotes the interests of those members in relation to the provision of covered gas services; user or consumer interest group means an association or body (whether incorporated or unincorporated)— (a) that has, as an object or purpose, the object or purpose of representing and promoting the interests of users, prospective users or end users of covered gas services; but (b) the members of which need not include a user, prospective user or end user. 29—Delegations Any delegation by the AER under section 44AAH of the Competition and Consumer Act 2010 of the Commonwealth extends to, and has effect for the purposes of, this Law, the Regulations and the Rules. 30—Confidentiality Section 44AAF of the Competition and Consumer Act 2010 of the Commonwealth has effect for the purposes of this Law, the Regulations and the Rules as if it formed part of this Law. See also Chapter 10 Part 2 Division 1. Division 1AA—Wholesale gas markets—AER monitoring and reporting functions 30AA—Definitions bilateral trading agreement means an agreement, entered into outside a wholesale gas market, to supply covered gas— (a) to a wholesale gas market participant; or (b) to an end user— (i) other than by a retailer; or (ii) by a retailer in a quantity exceeding the amount prescribed by the wholesale market monitoring guidelines; effective competition has the meaning given by section 30AB; financial risk management product means a contract or other arrangement, entered into by a wholesale gas market participant, to manage financial risk including, without limitation, risks associated with the following: (a) volatility in the price for 1 or more covered gases in a wholesale gas market; (b) volatility in supply and demand in a wholesale gas market; (c) volatility in the price of services involved in the extraction, refinement or processing, transportation or storage of 1 or more covered gases; gas contract means an agreement, entered into by a wholesale gas market participant, however described and whether coming into existence before or after the commencement of this section that relates to 1 or more of the following: (a) the supply of covered gas; (b) the purchase of covered gas; (c) the transportation of covered gas; (d) the storage of covered gas; (e) the refining or processing, including compression and blending, of covered gas; (f) relating to emissions produced or avoided in the extraction, refining or processing, supply or use of covered gas; (g) a function or process prescribed by the Regulations or the Rules; relevant agreement means the following: (a) a bilateral trading agreement; (b) a financial risk management product; (c) a gas contract; wholesale gas market means— (a) a wholesale market for covered gas, regulated under this Law and the Rules, including the following: (i) a declared wholesale gas market; (ii) a short term trading market; (iii) a gas trading exchange; or (b) a wholesale market for the transportation or storage of covered gas including a capacity auction; or (c) a wholesale market prescribed by the Regulations; wholesale gas market participant means a person who is 1 or more of the following: (a) a person who is registered on the Gas Bulletin Board; (b) a person who supplies covered gas to or withdraws covered gas from a gas trading exchange administered by AEMO; (c) a Registered participant; (d) a member of a class of persons prescribed by the Regulations or the Rules; wholesale market monitoring guidelines means the guidelines prepared under section 30AT. 30AB—Meaning of effective competition For the purposes of this Division, the AER must, in assessing whether there is effective competition within a wholesale gas market, have regard to— (a) whether— (i) there are active competitors in the market and whether those competitors hold a reasonably sustainable position in the market; or (ii) there is merely the threat of competition in the market; and (b) whether prices are determined on a long term basis by underlying costs rather than the existence of market power, even though a wholesale gas market participant may hold a substantial degree of market power from time to time; and (c) whether barriers to entry into the market are sufficiently low so that a substantial degree of market power may only be held by a wholesale gas market participant on a temporary basis; and (d) whether there is independent rivalry in all dimensions of the price, product or service offered in the market; and (e) other matters the AER considers relevant. 30AC—AER wholesale market monitoring and reporting functions (1) The AER wholesale market monitoring functions are as follows: (a) to, in accordance with this Law and the Rules, regularly and systematically monitor and review— (i) the performance of wholesale gas markets; and (ii) the operation and effect on wholesale gas markets of financial risk management products; and (iii) whether the availability of financial risk management products has an effect on competition within, and the efficient functioning of, wholesale gas markets; and (iv) bilateral trading agreements, including their effect on wholesale gas markets; (b) in connection with paragraph (a)—to identify and analyse whether, for a particular wholesale gas market— (i) there is effective competition within the market; and (ii) there are features of the market that may be detrimental to effective competition within the market; and (iii) there are features of the market that may be impacting detrimentally on the efficient functioning of the market and, if so, the extent of the inefficiency; and (iv) there are features of the market that may be impacting detrimentally on the achievement of the national gas objective; and (v) bilateral trading agreements have an impact on the efficient functioning of the market; (c) other monitoring or analysing functions, conferred on the AER by the Rules, relating to the following matters within a wholesale gas market: (i) offers; (ii) prices, including forecast and actual prices and bidding. (2) The AER wholesale market reporting functions are as follows: (a) to prepare, at least once every 2 years, a report on the performance of the AER wholesale market monitoring functions (a monitoring report); (b) to provide, as the AER thinks fit, advice to the MCE on the results of the performance of the AER wholesale market monitoring functions, including advice as to— (i) whether the results identify a need for a legislative, regulatory or other response to address systemic or other features of a wholesale gas market that may— (A) be detrimental to effective competition within the market; or (B) detrimentally impact on the efficient functioning of the market; and (ii) limitations on the AER's ability to communicate with relevant persons about the performance of the AER wholesale market monitoring functions; (c) other reporting requirements, conferred on the AER by the Rules, relating to the AER wholesale market monitoring functions. (3) A monitoring report must, for a wholesale gas market monitored during the period to which the report relates— (a) be for a monitoring period of at least 5 years; and (b) contain a discussion and analysis of— (i) the results of the performance of the AER wholesale market monitoring functions for the relevant period; and (ii) features of the market with a detrimental impact on the efficient functioning of the market and the achievement of the national gas objective, including, but not limited to, significant barriers to entry; and (iii) the effect of bilateral trading agreements on the efficient functioning of the market; and (iv) structural features of the covered gas industry that generate concerns that there may not be effective competition within the market; and (v) inefficiencies in the market, their causes and whether conditions in the market are such that the inefficiencies are likely to impact detrimentally, in the long term, on the efficient functioning of the market; and (vi) the monitoring methodology applied and the results of indicators, tests and calculations performed; and (vii) other matters of a long term nature relevant to effective competition within the market, including, for example— (A) observations relating to planned increases in pipeline capacity; and (B) trends in demand for covered gases; and (C) trends in the uptake of alternative sources of energy. (4) The AER must publish a monitoring report on its website. (5) Before publishing a monitoring report the AER must consult with relevant stakeholders. (6) Despite subsection (3)(a), a report prepared within the 5 years after the commencement of this section must relate to the period commencing on the day this section commences. 30AD—Information to be treated as confidential Information obtained by the AER under this Division is taken to have been given to the AER in confidence, whether or not a claim of confidentiality is made. 30AE—Redaction of information (1) When obtaining a relevant agreement or information about a relevant agreement for the purposes of a function under this Division, the AER must consider a request to omit information that would identify a party to the agreement who is not a wholesale gas market participant. (2) The AER must grant the request unless satisfied that omitting the information is likely to materially affect the AER's ability to undertake 1 or more functions under this Division. Subdivision 2—Use of general information gathering powers 30AF—Limits on use of section 42 information gathering powers (1) In undertaking a function under this Division the AER must not use the powers under section 42 in respect of a relevant agreement that ceased to have effect more than 5 years before the commencement of this section. (2) The Regulations or the Rules may provide that the powers under section 42 must not be used for a function under this Division for 1 or more classes of relevant agreement. 30AG—Matters to be considered before using section 42 information gathering powers Before using the powers under section 42 for a function under this Division, the AER must— (a) be satisfied the information is reasonably required for the AER to carry out the function; and (b) consider whether the information— (i) is publicly available; or (ii) can be obtained by the AER in another way. Subdivision 3—Market monitoring information notices and market monitoring information orders 30AH—Definitions In this Subdivision— market monitoring information notice means a notice prepared and served by the AER in accordance with this Subdivision requiring the person named in the notice to do 1 or more of the following: (a) give the AER the information or a relevant agreement specified in the notice; (b) prepare, maintain and keep information specified in the notice in a manner and form specified in the notice; market monitoring information order means an order made by the AER in accordance with this Subdivision requiring each person of a class specified in the order to do 1 or more of the following: (a) give the AER the information or a relevant agreement specified in the order; (b) prepare, maintain and keep information specified in the order in a manner and form specified in the order. 30AI—Urgent notices and urgent orders The AER may specify a market monitoring information notice or a market monitoring information order as urgent if the AER reasonably believes that access to the relevant information is time critical. 30AJ—Content of notices and orders (1) A market monitoring information notice or a market monitoring information order must specify the following: (a) the information that must be prepared, maintained and kept; (b) the information or agreement that must be given to the AER; (c) if the notice or order requires information to be prepared, maintained and kept—the AER's reasons for requiring information to be prepared, maintained and kept; (d) if the notice or order requires information or an agreement to be given to the AER— (i) the reasons the AER requires the information or agreement; and (ii) the date by which the information or agreement must be given to the AER; (e) the period in which the notice or order operates. (2) A market monitoring information notice or a market monitoring information order may specify the following: (a) the form in which information or an agreement is to be given to the AER; (b) the way the information or agreement is to be given to the AER. 30AK—Notices and orders may be made for both past and future information (1) A market monitoring information notice or a market monitoring information order may apply to 1 or more of the following: (a) a period before the notice was served or the order was made; (b) a period after the notice was served or the order was made. (2) A market monitoring information notice or a market monitoring information order must not be used to obtain a relevant agreement, or information about a relevant agreement, that ceased to have effect more than 5 years before the commencement of this section. 30AL—Making and serving notices and orders (1) The AER may, if it considers it reasonably necessary for the performance of its functions under this Division— (a) serve a market monitoring information notice on a person named in the notice; and (b) make a market monitoring information order. (2) The AER must, when considering if it is reasonably necessary to serve a market monitoring information notice or make a market monitoring information order— (a) be satisfied the AER requires the information or agreement to carry out a wholesale market monitoring function; and (b) consider the costs that are likely to be incurred by a person responding to the notice or order; and (c) consider whether the information— (i) is publicly available; or (ii) can be obtained by the AER in another way. (3) A market monitoring information notice or a market monitoring information order must not be used for the purpose of— (a) investigating a breach or possible breach of this Law, the Regulations or the Rules; or (b) commencing or conducting proceedings for a breach or possible breach of this Law, the Regulations or the Rules; or (c) commencing or conducting an appeal from a decision in proceedings for a breach or possible breach of this Law, the Regulations or the Rules; or (d) responding to an application for review of a decision of the AER under Chapter 8 Part 5. (4) A market monitoring information order must be made in accordance with the Rules. (5) The Regulations or the Rules may provide that a market monitoring information notice or a market monitoring information order must not be used to obtain the following: (a) 1 or more classes of relevant agreement; (b) information about 1 or more classes of relevant agreement. 30AM—AER must consult before making order (1) Before making a market monitoring information order, the AER must consult the public. (2) Consultation must be undertaken in accordance with the Rules. 30AN—Publication of orders The AER must publish a market monitoring information order on the AER's website as soon as practicable after the order is made. 30AO—Opportunity to be heard before notice served (1) Before serving a market monitoring information notice, the AER must give the person on whom the AER intends to serve the notice a draft of the notice and an opportunity to make a submission on the draft notice. (2) A draft notice must state— (a) whether the notice is to be issued as a standard notice or an urgent notice; and (b) for an urgent notice—the reasons the AER believes access to the relevant information is time critical. (3) A submission must be made— (a) for a standard notice—within the longer of the following: (i) 20 business days after the draft notice is given to the person; (ii) the period stated in the notice; or (b) for an urgent notice—within the period stated in the draft notice, being at least 5 business days and not more than 10 business days after the draft notice is given to the person. (4) A submission made within the time periods provided for in subsection (3) must be considered by the AER before serving a market monitoring information notice on a person. 30AP—Compliance with notice (1) A person who is named in and served with a market monitoring information notice must comply with the notice. This section is a civil penalty provision. (2) If a market monitoring information notice names 2 or more related bodies corporate, a notice served on the holding company is taken to have been served on each of the named related bodies corporate. 30AQ—Compliance with order (1) A person who is a member of a class of persons specified in a market monitoring information order must comply with the order. This section is a civil penalty provision. (2) The AER may, by written notice, exempt a person from compliance with an order— (a) in whole or part; and (b) conditionally or unconditionally. 30AR—Certification of compliance by statutory declaration (1) The AER may direct the recipient of a market monitoring information notice or market monitoring information order to verify that the recipient's response to the notice or order is accurate and comprehensive by way of a statutory declaration. (2) A direction may require the statutory declaration to be given by a named officer of the recipient or the holder of a specified office for the recipient. (3) A direction must be given in the relevant market monitoring information notice or market monitoring information order. (4) A failure to comply with a direction given under this section is taken to be a failure to comply with the relevant market monitoring information notice or market monitoring information order. 30AS—Subdivision does not limit powers under Division 3 This Subdivision does not limit the operation of Division 3. Subdivision 4—Miscellaneous 30AT—Wholesale market monitoring guidelines (1) The AER must prepare guidelines about the following: (a) the scope of the AER wholesale market monitoring functions; (b) the collection of information for the purposes of this Division; (c) the publication and reporting of information under this Division. (2) Without limiting what may be included in wholesale market monitoring guidelines, the guidelines must include the following: (a) information about the things the AER proposes to consider in assessing— (i) effective competition in wholesale gas markets; and (ii) the effective functioning of wholesale gas markets; (b) a summary of the compliance obligations of persons who hold information; (c) the processes the AER proposes to adopt in requesting information, including processes designed to minimise the time and resources wholesale gas market participants will devote to responding to a request; (d) the type of information the AER expects to routinely request and how frequently it will request that information; (e) the type of information the AER does not expect to request; (f) classes of relevant agreements the AER does not expect to request; (g) the formats in which the AER expects information to be submitted; (h) a general outline of the way the AER will ensure that commercially sensitive information obtained for wholesale market monitoring functions is kept securely; (i) other matters prescribed by the Regulations or the Rules. (3) Before making wholesale market monitoring guidelines the AER must consult in accordance with the Rules. (4) Wholesale market monitoring guidelines must be— (a) made in accordance with the Rules; and (b) published on the AER website within 6 months after commencement of this section. 30AU—Review of wholesale market monitoring powers The MCE is to review the operation of this Division as soon as possible after the period of 4 years and 6 months after the commencement of this section. Division 1A—Rate of return instrument 30A—Definitions consumer reference group, for making a rate of return instrument, see section 30H(1)(a); explanatory information, for a rate of return instrument, means information about the content of the instrument, including (but not limited to) information explaining— (a) the reasons for the rate of return on capital or the value of imputation credits under the instrument; and (b) how the stated value, or the way to calculate the rate or value, was decided; and (c) if the instrument replaces another instrument— (i) the differences (if any) between the instrument and the replaced instrument; and (ii) the reasons for any differences; and (d) why the AER is satisfied the instrument will, or is most likely to, contribute to the achievement of the national gas objective to the greatest degree; and (e) how the AER had regard to the following in making the instrument: (i) the revenue and pricing principles; (ii) the matters mentioned in section 30G; (iii) estimation methods, financial models, market data and other evidence relevant to making the instrument; (iv) prevailing conditions in the market for equity funds; (v) the interrelationships between financial parameters used, or to be used, in relation to deciding the rate or value. 30B—Rate of return instrument has force of law (1) A rate of return instrument has the force of law in this jurisdiction. (2) An Act of this jurisdiction regulating the making of subordinate legislation does not apply to a rate of return instrument. 30C—Rate of return instrument is binding on AER and scheme pipeline service providers A rate of return instrument is binding on— (a) the AER in relation to the performance or exercise of an AER economic regulatory function or power; and (b) each scheme pipeline service provider in relation to a matter relevant to the performance or exercise of an AER economic regulatory function or power. Subdivision 2—Requirement to make rate of return instrument 30D—AER to make rate of return instrument (1) This section applies if a rate of return on capital or the value of imputation credits is required for performing or exercising an AER economic regulatory function or power. (2) The AER must make an instrument (a rate of return instrument) stating— (a) for a rate of return on capital—the way to calculate the rate; and (b) for the value of imputation credits—the value or the way to calculate the value. (3) The AER may make an instrument only if satisfied the instrument will, or is most likely to, contribute to the achievement of the national gas objective to the greatest degree. (4) Subject to subsection (3), the way to calculate a rate of return on capital must include a weighted average of an allowed return on equity and an allowed return on debt. (5) In making an instrument, the AER must have regard to— (a) the revenue and pricing principles; and (b) other information the AER considers appropriate. 30E—Content of rate of return instrument (1) If a rate of return instrument states the value of imputation credits, the instrument must state a single value to apply in relation to all scheme pipeline service providers. (2) If a rate of return instrument states a way to calculate the rate of return on capital or the value of imputation credits, the instrument must— (a) provide for the same methodology to apply in relation to all pipeline service providers in calculating the rate or value; and (b) provide for the methodology to apply automatically without the exercise of any discretion by the AER. Example for paragraph (b)— The instrument can not include different methodologies or a band of values from which the AER could choose in applying the instrument. (3) Subject to subsections (1) and (2), the instrument may include other matters the AER considers appropriate. Matters to help a scheme pipeline service provider calculate a rate of return or the value of imputation credits. Subdivision 3—Consultation requirements 30F—Process for making rate of return instrument Subject to this Division, the AER may make a rate of return instrument in the way it considers appropriate. 30G—Other matters AER must have regard to in making instrument In making a rate of return instrument, the AER must also have regard to the following— (a) advice, recommendations or submissions given by a consumer reference group; (b) submissions made, and the report published, under section 30H; (c) submissions made under section 30J; (d) the report given by the independent panel under section 30K. 30H—Requirements before publishing draft instrument (1) Before publishing a draft rate of return instrument under this Subdivision, the AER must— (a) establish a reference group to help the AER implement an effective consumer consultation process for making the proposed instrument (a consumer reference group); and (b) publish a notice on its website— (i) inviting persons to make a written submission to the AER about the proposed instrument; and (ii) stating the period, not less than 28 days, within which a submission must be made; and (c) seek concurrent expert opinions or evidence about the proposed instrument. (2) A person may make a submission after the stated period only with the written approval of the AER. (3) Subject to subsections (4) and (5), the AER may seek the expert opinions or evidence in the way it considers appropriate. The AER might convene a conference of experts to identify key issues, and areas of dispute and agreement among the experts, about the content of the proposed instrument. (4) The AER must call for nominations of eligible experts but may seek the expert opinions or evidence from any eligible expert. (5) If practicable, the AER must seek the expert opinions or evidence from at least 3 eligible experts. (6) The AER must publish on its website— (a) submissions made under this section; and (b) a report on the outcomes of seeking the expert opinions or evidence. (7) In this section— eligible expert means a person with qualifications or experience in a field the AER considers relevant to making a rate of return instrument. Examples of relevant fields— Finance, economics, law, consumer affairs, institutional investment. 30I—Consumer reference group (1) A consumer reference group for making a rate of return instrument— (a) is to consist of the members appointed by the AER; and (b) may carry out its activities, including giving advice or recommendations to the AER about the instrument, in the way it considers appropriate. (2) Without limiting subsection (1)(b), the consumer reference group may— (a) consult with consumers of covered gas; and (b) facilitate consumer engagement in the process for making the instrument; and (c) make written submissions to the AER about the content of the instrument and the process for making it. (3) The AER must publish on its website any written advice, recommendations or submissions given to it by the consumer reference group. 30J—Publication of draft instrument and other information (1) The AER must, at least 6 months before making a rate of return instrument, publish on its website— (a) a draft of the proposed instrument and the explanatory information for the instrument; and (b) a notice— (i) inviting persons to make a written submission to the AER about the proposed instrument; and (ii) stating the period, not less than 28 days, within which a submission must be made. (2) A person may make a submission after the stated period only with the written approval of the AER. (3) The AER must publish submissions made under this section on its website. 30K—Report about draft instrument by independent panel (1) The AER must, as soon as practicable after publishing the draft instrument, establish an independent panel to give the AER a written report about the instrument. (2) The panel— (a) may carry out its activities, including giving the report, in the way it considers appropriate; but (b) must seek to give the report by consensus. (3) The panel must— (a) consist of at least 3 members, appointed by the AER, who have qualifications or experience in a field the AER considers relevant to making a rate of return instrument; and Examples of relevant fields— Finance, economics, law, consumer affairs, institutional investment. (b) give the report to the AER before the AER makes the instrument. (4) The AER must take reasonable steps to minimise and manage any conflicts of interest a panel member may have in relation to making the instrument. (5) The report must— (a) include the panel's assessment of the evidence and reasons supporting the rate of return on capital or the value of imputation credits under the instrument; and (b) state whether the report is given by consensus. (6) The AER must publish the report on its website. 30L—Publication of explanatory information The AER must publish explanatory information for a rate of return instrument on its website when the instrument is published under section 30N. 30M—Failure to comply does not affect validity Failure to comply with this Subdivision does not invalidate or otherwise affect a rate of return instrument. Subdivision 4—Publication, review and other matters 30N—Publication of rate of return instrument After making a rate of return instrument, the AER must publish the instrument on its website. See section 30L for the requirement to publish explanatory information for the instrument. 30O—Commencement and duration of instrument A rate of return instrument— (a) commences on the day after it is published on the AER's website; and (b) remains in force until the end of the day it is replaced under section 30P. 30P—Review and replacement of instrument (1) The AER must— (a) review each rate of return instrument; and (b) make a new rate of return instrument under this Division to replace the reviewed instrument. (2) The AER must replace the reviewed instrument by publishing the new instrument on its website on the day that is— (a) the fourth anniversary of the day the reviewed instrument was published; or (b) if the day mentioned in paragraph (a) is not a business day—the first business day after that day. 30Q—Application of instrument (1) A rate of return instrument— (a) applies for the purposes of an AER economic regulatory decision made after the commencement of the instrument; and (b) does not affect an AER economic regulatory decision made before the commencement of the instrument. (2) To remove any doubt, it is declared that the application of the instrument under this Law, including, for example, in making an access arrangement decision, is an AER economic regulatory function or power. 30R—Rate of return instrument may apply for this Law and the National Electricity Law (1) The AER may make 1 rate of return instrument for the purposes of this Law and the National Electricity Law. (2) If the AER acts under subsection (1)— (a) the process for making the instrument under Part 3 Division 1B of the National Electricity Law is taken to have been complied with for the instrument; and (b) the instrument is taken to be the rate of return instrument for the purposes of the National Electricity Law. See also section 18W of the National Electricity Law. (3) To remove any doubt, it is declared that the instrument may include different ways to calculate the rate of return on capital and the value of imputation credits for the purposes of this Law and the National Electricity Law. Subdivision 5—Confidentiality of information 30S—Confidentiality (1) If a person wishes to give information to the AER for the purposes of this Division in confidence— (a) the person must give the AER written notice that the person claims the information is confidential; and (b) give reasons to support the claim, including— (i) information about the detriment that might be caused to the person if the information were disclosed by the AER; and (ii) information that— (A) is reasonably within the person's knowledge and capacity to give; and (B) may be relevant to the AER's consideration under section 329 about whether the public benefit in disclosing the information outweighs the detriment. (2) In giving reasons to support a claim under subsection (1) about information received from another person (a third party), a person may include information that— (a) is reasonably within the person's knowledge and capacity to give; and (b) is about the detriment that might be caused to the third party if the information were disclosed by the AER; and (c) may be relevant to the AER's consideration under section 329 about whether the public benefit in disclosing the information outweighs the detriment. (3) In acting under subsection (1), a person must specifically identify the information in relation to which the claim is made. (4) Information given to the AER for the purposes of this Division is not to be regarded as being given in confidence, or to be confidential in any way, unless the information is subject to an express claim of confidentiality made under this section. 30T—Disclosure of information given in confidence (1) Chapter 10 Part 2 Division 1 applies in relation to publishing information given to the AER in confidence under this Division. information includes advice, recommendations, submissions and reports.