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Western Australia regulation
What this law does (mechanics first)
Establishes a national regime that makes certain natural gas pipelines subject to third‑party access rules ("Covered Pipelines") and sets the detailed process by which that coverage happens (sections 1.1–1.39). Coverage can be automatic (pipelines listed in Schedule A), by application to the National Competition Council (NCC) with a Relevant Minister decision (ss 1.2–1.19), by the pipeline owner submitting an Access Arrangement to the Relevant Regulator (s 1.20 / 2.3), or by a competitive tender process approved by the Relevant Regulator for new pipelines (s 1.21 / 3.21–3.36).
Requires the owner/operator of every Covered Pipeline (the "Service Provider") to lodge an Access Arrangement with the Relevant Regulator describing the services to be offered, benchmark (Reference) tariffs, terms and conditions, capacity management and trading rules, queuing and extensions/expansions policies, and review dates (ss 2.2, 3.1–3.20). The Relevant Regulator publicly consults, issues draft and final decisions, may approve, require changes, or draft and impose an Access Arrangement if the provider fails to submit a compliant one (ss 2.9–2.21, 2.20, 2.23).
Sets a formal dispute-resolution/arbitration path for access disputes between Prospective Users and Service Providers (Part 6). The Arbitrator must apply the Access Arrangement and take into account listed factors (s 6.15); in tariff-only disputes the Arbitrator can order provision of a Reference Service at the Reference Tariff (ss 6.13–6.14). Arbitration decisions bind the Service Provider and (subject to an opt‑out window) the Prospective User (ss 6.16, 6.24).
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Direct links to the current provisions in National Third Party Access Code for Natural Gas Pipeline Systems.
Sourced from the Western Australian Legislation website (legislation.wa.gov.au). Not the authorised version.
Western Australia
Gas Pipelines Access (Western Australia) Act 1998 2
National Third Party Access Code for Natural Gas Pipeline Systems
Western Australia
National Third Party Access Code for Natural Gas Pipeline Systems
Contents
1.1 Pipelines in Schedule A are Covered 4
1.2 NCC to Recommend on an Application for Coverage 4
1.3 4
1.4 5
1.5 5
1.6 6
1.7 6
1.8 6
1.9 7
1.10 7
1.11 8
1.12 8
1.13 Relevant Minister to Decide on a Coverage Recommendation 8
1.14 8
1.15 9
1.16 9
1.17 9
1.18 9
1.19 9
1.20 Pipelines subject to Access Arrangements submitted under section 2*.3 are Covered* 10
1.21 New Pipelines the subject of an approved competitive tender are Covered 10
1.22 Opinion of NCC in respect of proposed Pipelines 10
1.23 10
1.24 Revocation of Coverage 11
1.25 11
1.26 11
1.27 12
1.28 12
1.29 12
1.30 13
1.31 13
1.32 13
1.33 13
1.34 Relevant Minister to Decide on a Revocation Recommendation 13
1.35 14
1.36 14
1.37 14
1.38 14
1.39 15
1.40 Extensions/Expansions of a Covered Pipeline 15
1.41 15
2.1 Submission of Access Arrangements 18
2.2 18
2.3 18
2.4 18
2.4A 19
2.5 19
2.6 20
2.7 20
2.8 20
2.9 Public Consultation and Approval 20
2.10 21
2.11 22
2.12 22
2.13 22
2.14 22
2.15 23
2.15A 23
Lays out comprehensive pricing and investment rules (Part 8). Reference Tariffs must follow principles intended to replicate efficient outcomes and recover prudent costs over asset lives. Three main methodologies are provided to determine Total Revenue: Cost of Service, IRR, or NPV (s 8.4). The Code deals with capital base valuation, new facilities investment, depreciation, rate of return and mechanisms for surcharges to recover incremental/new investment costs from incremental users (ss 8.10–8.29, 8.30–8.31, 8.25–8.26).
Imposes ring‑fencing and information rules on Service Providers (Part 4 and Part 5). Minimum ring‑fencing (legal entity, no Related Business, separate accounts, confidentiality protections, separation of marketing staff) is required with possible additional obligations or waivers by the Relevant Regulator (ss 4.1–4.16). Service Providers must maintain an Information Package, respond to specific access requests within set timeframes, and keep public registers of spare/developable capacity (ss 5.1–5.9).
Provides governance and publication rules (Part 7): regulator approvals for Associate Contracts (s 7.1), public registers of decisions and materials (ss 7.8–7.11), confidentiality carve‑outs (s 7.12), and code‑change procedures (Part 9).
Who it affects
Why it matters (intended effects and the mechanics that produce them)
Creates predictable, nationally consistent procedures so third parties can request access to pipeline capacity rather than being refused or forced into bespoke negotiation. Access Arrangements operate as an upfront, regulator‑approved menu of services and Reference Tariffs (ss 2.2, 3.1–3.6).
Balances incentives for investment and cost recovery against user access: the Code lets Service Providers propose tariffs and recover prudent capital (including via surcharges for incremental capacity) but requires regulator scrutiny of asset valuation, rate of return and prudence (Part 8; ss 8.15–8.26, 8.30–8.31).
Limits commercial foreclosure by imposing ring‑fencing and Associate Contract approval requirements to reduce conflicts between pipeline businesses and upstream/downstream related businesses (Part 4; s 7.1).
Practical trade‑offs, incentives and likely behavioural effects
Who pays: Users bear the direct cost of services through Reference Tariffs and, potentially, Surcharges for incremental/new facilities (ss 8.25–8.26). Service Providers bear compliance costs (accounting, reporting, legal, ring‑fencing) and the risk of regulator‑set outcomes that can affect returns (ss 4.1–4.3; 8.6).
Investment incentives: the Code allows recovery of New Facilities Investment (subject to prudence and efficiency tests in s 8.16), and includes incentive mechanisms that let providers retain some efficiency gains (ss 8.16, 8.44–8.46). But detailed regulator oversight and valuation rules (ss 8.10–8.14) create regulatory discretion and forecasting risk that affect investment timing and appetite.
Contract freedom vs regulatory certainty: Service Providers and users can still negotiate outside the Access Arrangement, but where disputes go to arbitration the Arbitrator must apply the Access Arrangement, giving users predictable enforcement (ss 2.50; 6.13–6.15). That reduces arbitration frequency but constrains what an arbitrator can order (s 6.18).
Concentrated benefits / diffuse costs: approvals of surcharges or capital recovery (benefit concentrated to the pipeline owner) may increase tariffs paid by many users (diffuse cost) unless competing pipelines or market pressures exist (ss 8.25–8.26).
Compliance, discretion and implementation risks
Heavy procedural burden: many notification, consultation and timing steps (e.g. 6‑month turnaround for Access Arrangement decisions (s 2.21), specific public‑notice windows) increase administrative work and delay risk.
Substantial regulatory discretion: the Relevant Regulator interprets prudence, sets initial capital bases, and may draft its own Access Arrangement if the provider fails to comply (ss 2.24, 8.6, 2.20, 2.23). That discretion introduces regulatory risk for investors.
Complex tariff mechanics: multiple allowable methodologies (Cost of Service, IRR, NPV), detailed capital valuation options (s 8.10), and permitted tariff variation methods (ss 8.3A–8.3H) create technical complexity for pricing and forecasting.
Overall, the Code converts broad policy aims (enable competition, limit monopoly abuse, provide fair access) into a detailed regulatory framework that reshapes negotiation, pricing and investment incentives by substituting a structured, largely public, regulator‑led process for purely private bargaining.
(Primary source sections cited in parentheses in the text above.)
2.16 23
2.16A 24
2.17 24
2.18 25
2.19 25
2.20 26
2.21 26
2.22 27
2.23 27
2.24 27
2.25 28
2.26 28
2.27 29
2.28 Review of an Access Arrangement 29
2.28A 29
2.28B 30
2.29 31
2.30 31
2.31 32
2.32 32
2.33 32
2.34 33
2.35 33
2.36 33
2.37 34
2.37A 34
2.38 34
2.38A 35
2.39 36
2.40 36
2.41 36
2.42 37
2.43 37
2.44 38
2.45 38
2.46 38
2.47 39
2.48 39
2.49. 39
2.50 Access Arrangement not to limit Access 40
2.51 Previous Access Arrangements 40
2.52 41
3.1 Services to be Offered 43
3.2 44
3.3 Reference Tariffs and Reference Tariff Policy 44
3.4 44
3.5 45
3.6 Terms and Conditions 45
3.7 Capacity Management Policy 45
3.8 45
3.9 Trading Policy 45
3.10 46
3.11 47
3.12. 47
3.13 48
3.14 48
3.15 48
3.16 Extensions/Expansions Policy 48
3.17 Review and Expiry of the Access Arrangement 49
3.18 50
3.19 51
3.20 51
3.21 Determining Reference Tariffs through a Competitive Tender Process 51
3.22 52
3.23 53
3.24 53
3.25 53
3.26 54
3.27 54
3.28 54
3.29 57
3.30 57
3.31 57
3.32 58
3.33 58
3.34 59
3.35 59
3.36 60
4.1 Ring Fencing Minimum Obligations 61
4.1A 63
4.2 63
4.3 Ring Fencing Obligations 64
4.4 64
4.5 Procedures for Adding Ring Fencing Obligations 65
4.6 65
4.7 66
4.8 66
4.9 66
4.10 66
4.11 66
4.12 Compliance Procedures and Compliance Reporting 67
4.13 67
4.14 67
4.15 Waiver of Ring Fencing Obligations 67
4.15A 69
4.16 Procedures for Waiving Ring Fencing Obligations 69
4.17 69
4.18 70
4.19 70
4.20 70
4.21 70
4.22 71
4.23 71
4.24 71
5.1 General Requests from Prospective Users 72
5.2 72
5.3 73
5.4 Specific Requests from Prospective Users 73
5.5 73
5.6 74
5.7 74
5.8 Information Provided by Users to the Market 74
5.9 75
6.1 Notification of a Dispute 79
6.2 79
6.3 79
6.4 80
6.5 Withdrawal and Termination of a Dispute 80
6.6 80
6.7 The Arbitration 80
6.8 81
6.9 81
6.10 81
6.11 82
6.12 82
6.13 82
6.14 83
6.15 Guidance for the Arbitrator 83
6.16 84
6.17 84
6.18 Restrictions on Decisions 84
6.19 Effect of a Surcharge 84
6.20 Prior Capital Contributions 85
6.21 Safe Operation of a Covered Pipeline 86
6.22 Obligation to Develop Capacity 86
6.23 87
6.24 Prospective User May Decide Not to Take a Service 88
6.25 Reservation of Capacity During an Access Dispute 88
6.26 Obligation to Reflect the Decision in a Draft Contract 88
6.27 89
7.1 Approval of Relevant Regulator Required for Associate Contracts 89
7.2 90
7.3 90
7.4 90
7.5 91
7.6 91
7.7 Decisions by the NCC, Relevant Minister, Relevant Regulator and Arbitrator 91
7.8 91
7.9 92
7.10 Public Register 94
7.11 Treatment of Confidential Information 94
7.12 95
7.13 95
7.14 96
7.15 Operational Guidelines 96
7.16 Extensions to Time Limits 96
7.17 97
7.18 97
7.19 97
7.20 97
7.21 98
7.22 98
8.1 General Principles 102
8.2 103
8.3 Form of Regulation and Variation of Reference Tariff 104
8.3A 104
8.3B 105
8.3C 105
8.3D 105
8.3E 106
8.3F 107
8.3G 107
8.3H 107
8.4 Total Revenue 108
8.5 109
8.5A. 109
8.6 110
8.7 110
8.8 Principles for Establishing the Capital Base 111
8.9 111
8.10 Initial Capital Base - Existing Pipelines 112
8.11 113
8.12 Initial Capital Base - New Pipelines 113
8.13 113
8.14 Initial Capital Base - After the Expiry of an Access Arrangement 114
8.15 New Facilities Investment 114
8.16 114
8.17 115
8.18 116
8.19 116
8.20 Forecast Capital Expenditure 117
8.21 117
8.22 117
8.23 Capital Contributions 118
8.24 118
8.25 Surcharges 118
8.26 119
8.27 Capital Redundancy 120
8.28 120
8.29 121
8.30 Rate of Return 121
8.31 121
8.32 Depreciation Schedule - Cost of Service 121
8.33 122
8.34 Application of Depreciation Principles to the IRR/NPV Methodology 122
8.35 123
8.36 Non Capital Costs 123
8.37 124
8.38 Allocation of Revenue (Costs) between Services 124
8.39 124
8.40 125
8.41 125
8.42 Allocation of Revenue (Costs) between Users 125
8.43 Prudent Discounts 126
8.44 Use of Incentive Mechanisms 127
8.45 127
8.46 128
8.47 Certain Reference Tariff Principles Not Subject to Periodic Review 129
8.48 129
8.49 Assessment of Compliance with Section 8 129
9.1 130
9.2 130
9.3 131
9.4 131
10.1 How this Code applies to Multiple Service Providers 132
10.2 133
10.3 How this Code applies to successor Service Providers 133
10.4 Overviews 134
10.5 134
10.6 Notices 134
10.7 Regulatory and Conduct Provisions 134
10.8 Definitions 135
10.9 148
SCHEDULE A — PIPELINES TO BE COVERED FROM COMMENCEMENT OF THE CODE
Notes
Compilation table 188
Defined terms
Western Australia
Gas Pipelines Access (Western Australia) Act 1998 2
[This is a copy of Schedule 2 to the Gas Pipelines Access (Western Australia) Act 1998 in its amended form.]
National Third Party Access Code for Natural Gas Pipeline Systems
[s. 3(1), 11, Sched. 1 cl. 1]
National Third Party Access Code for Natural Gas Pipeline Systems
INTRODUCTION
This Code establishes a national access regime for natural gas pipeline systems.
The objective of this Code is to establish a framework for third party access to gas pipelines that:
(a) facilitates the development and operation of a national market for natural gas; and
(b) prevents abuse of monopoly power; and
(c) promotes a competitive market for natural gas in which customers may choose suppliers, including producers, retailers and traders; and
(d) provides rights of access to natural gas pipelines on conditions that are fair and reasonable for both Service Providers and Users; and
(e) provides for resolution of disputes.
Under the Code, the owner or operator of a Pipeline that is Covered under the Code is required to lodge an Access Arrangement with the Relevant Regulator. The Access Arrangement is similar in many respects to an undertaking under Part IIIA of the Trade Practices Act and is designed to allow the owner or operator of the Covered Pipeline to develop its own Tariffs and other terms and conditions under which access will be made available, subject to the requirements of the Code. The Relevant Regulator will seek comments on the Access Arrangement and then may either accept it or reject it and specify amendments it requires to be made to the Access Arrangement. If rejected, the Access Arrangement must be modified and resubmitted. Under certain circumstances, the Relevant Regulator may draft and approve its own Access Arrangement. The legislation which implements the Code provides for administrative review of certain regulatory decisions made under the Code.
Important features of the Code are:
· Coverage - the mechanism by which Pipelines (including distribution systems) become subject to the Code;
· reliance on an up-front Access Arrangement outlining Services and Reference Tariffs applicable to a Covered Pipeline;
· pricing principles;
· ring fencing;
· information disclosure requirements;
· binding arbitration where there is a dispute; and
· specific timelines for all processes.
The aim of the Code is to provide sufficient prescription so as to reduce substantially the number of likely arbitrations, while at the same time incorporating enough flexibility for the parties to negotiate contracts within an appropriate framework. The Code has also been designed to provide a clear national access regime, with consistency between different jurisdictions.
This introduction to the Code and the overview in italics at the beginning of each section of the Code do not form part of the Code but in certain circumstances regard may be had to them in interpreting the Code (see Sections 10.4 and 10.5).
1. COVERAGE
This section of the Code describes the kinds of gas infrastructure which are subject to the Code and the basis on which particular infrastructure is or may become subject to the Code.
In relation to the first issue, the scope of the Code is limited to Pipelines used for the haulage of Natural Gas. The definition of Pipeline includes gas transmission pipelines and distribution networks and related facilities, but excludes upstream facilities.
In relation to the second issue, a Pipeline may become Covered in one of four ways.
· Schedule A lists the Pipelines which are automatically Covered by the Code (section 1.1).
· In relation to other Pipelines, a case by case approach applies under which specific criteria are applied to individual Pipelines to determine whether they are Covered (sections 1.2-1.19).
· In addition, where a Pipeline is not Covered a Service Provider may itself request Coverage by proposing an Access Arrangement for the Pipeline to the Relevant Regulator for approval (sections 1.20 and 2.3).
· Finally, if a competitive tender process approved by the Relevant Regulator is used to select the Service Provider for a new Pipeline, that new Pipeline will be Covered from the time the Relevant Regulator approves the outcome of the competitive tender (section 1.21).
The Code accordingly provides a high degree of certainty for the Pipelines identified in Schedule A, while retaining the flexibility to bring in other or new Pipelines on a case-by-case basis. Additional flexibility to respond to changing circumstances exists as a result of the potential for Coverage to be Revoked where the criteria for Coverage cease to be satisfied.
In simple terms, the process for case by case Coverage is as follows:
· any person may seek Coverage of a Pipeline by applying to the National Competition Council (the NCC);
· the NCC publishes a public notice on the application and seeks submissions, including from the Service Provider;
· the NCC considers the submissions and makes a recommendation to the Relevant Minister, applying specified criteria; and
· the Relevant Minister considers the recommendation and decides on Coverage.
The term “Pipeline” is defined in the Gas Pipelines Access Law to include part of a Pipeline. Consequently, an application can be made for the Coverage of the whole or any part of a Pipeline provided the Pipeline or the relevant part of the Pipeline is owned or operated by the same Service Provider or group of Service Providers.
The process for Revocation is similar to the process for Coverage.
As a decision to Cover a Pipeline or revoke Coverage of a Pipeline can have major commercial implications for the Service Provider and Prospective Users, the Gas Pipelines Access Law provides a mechanism for review of the decision by the Relevant Appeals Body.
An extensions/expansions policy in the Access Arrangement for a Covered Pipeline will define when an extension to, or expansion of the Capacity of, a Covered Pipeline will be treated as part of the same Covered Pipeline and when that extension or expansion is to be regarded as a separate Pipeline which may be the subject of a separate Coverage application.
Each Pipeline listed in Schedule A is a Covered Pipeline from the date of commencement of the Code.
Pipelines other than those listed in Schedule A may become Covered after the commencement of the Code where a person applies to the NCC for the Pipeline to be Covered and, after receiving a recommendation from the NCC, the Relevant Minister decides that the Pipeline should be Covered.
Any person, including the Relevant Regulator, may make an application to the NCC requesting that a particular Pipeline be Covered. A single application may be made under this section 1.3 for the Coverage of the whole or any part of a Pipeline, provided that all of that Pipeline, or all of that part of a Pipeline, is owned or operated by the same Service Provider or group of Service Providers. The NCC may publish guidelines concerning the form and content of Coverage applications and specifying the amount of any fee to be paid on the making of an application. If it does so, applications must be made in accordance with those guidelines.
When the NCC receives an application under section 1.3 the NCC must:
(a) if it considers that the application has been made on trivial or vexatious grounds, reject the application without further consideration; and
(b) in all other cases within 14 days after receipt of the application:
(i) inform the Service Provider and each other person known to the NCC who the NCC believes has a sufficient interest in the matter that it has received the application; and
(ii) publish a notice in a national daily newspaper which at least:
(A) describes the Pipeline to which the application relates;
(B) states how copies of the application may be obtained; and
(C) requests submissions within 21 days after the date of the notice.
The NCC must provide a copy of the application to any person within 7 days after the person requests a copy and pays any reasonable fee required by the NCC.
Within 35 days (but not earlier than 21 days) after the day on which a notice is published under section 1.4(b), the NCC must prepare a draft recommendation on the application and provide a copy of the draft recommendation to the applicant, the Service Provider, each person who made a submission and any other person who requests a copy. In preparing the draft recommendation the NCC must consider any submissions received within the time specified in the notice published under section 1.4(b) and it may (but is not obliged to) consider any submissions received after that time.
Within 28 days (but not earlier than 14 days) after the day on which its draft recommendation became publicly available, the NCC must submit a recommendation to the Relevant Minister:
(a) that the Pipeline be Covered; or
(b) that the Pipeline not be Covered.
If the NCC recommends that the Pipeline be Covered, the NCC may do so to a greater or lesser extent than requested by the applicant if, having regard to the part of the Pipeline that is necessary to provide Services that Prospective Users may seek, the NCC considers it appropriate. The NCC may not recommend Coverage of a greater part of a Pipeline than is owned or operated by the same Service Provider or group of Service Providers.
In forming its recommendation the NCC must consider any submissions received from the Service Provider, the applicant or any other person within 14 days after the date on which its draft recommendation became publicly available and it may (but is not obliged to) consider submissions received after that time.
Subject to sections 1.4(a) and
This is an opening excerpt, not the complete document.