The Australian Energy Regulator (AER) is seeking stakeholder feedback on its draft decision for APA Group’s South West Queensland Pipeline (SWQP) form of regulation review.
The draft decision is that the SWQP should remain a non-scheme pipeline, subject to lighter handed regulation.
The AER said that it has found the benefits of scheme regulation do not outweigh the increased costs of scheme regulation because it is uncertain whether scheme regulation will substantially improve prices, and access under non-scheme regulation has the potential to improve in the future.
However, the review also found that prices for SWQP services may be high and shippers face challenges in negotiating the terms and conditions of access to the SWQP. The AER proposes to monitor prices, terms and conditions on the pipeline as capacity becomes available for contracting. If prices on the SWQP increase without reasonable cause, this could justify a further review of the form of regulation of this pipeline.
The AER gained responsibility for determining the form of regulation of pipelines in March 2023, when reforms to the gas pipeline regulatory regime commenced.
The review of the SWQP is the first of a series of AER initiated form of regulation reviews planned over several years. The SWQP was chosen as the first pipeline for a review due to its importance to the east coast gas system.
The SWQP is a bi-directional transmission pipeline consisting of two parallel pipelines, linking Wallumbilla in south-east Queensland to Moomba in South Australia.
The AER said that it strongly encourages stakeholders to provide feedback and comments on the positions it has adopted. This is a draft decision and subject to change, based on a range of factors, including submissions that are provided through consultation and new information it receives.
Written submissions or requests to make a submission via alternative methods should be emailed to PipelineFOR@aer.gov.au by 8 November 2024.
APA Group CEO and Managing Director, Adam Watson, said that APA welcomes the AER’s draft decision to maintain the current form of regulation for the SWQP.
“This decision, if confirmed, creates confidence to make the necessary investment in our East Coast Gas Grid to support energy security for our customers and consumers. It will also help facilitate our nation’s ambition to deliver a reliable, affordable and lower emissions energy system,” Mr Watson said.
Featured image: Maksim Safaniuk/shutterstock.com.