Pipeline industry body APIA has made a submission stating that new regulatory measures in gas transmission pipeline capacity trading could result in a substantial cost to the gas market with no guarantee of an increase in capacity trading.
In its submission to the COAG Energy Council Consultation paper on Enhanced Pipeline Capacity Information, APIA points out that an independent cost-benefit analysis concluded that implementing one option under consideration could result in a cost of $8.8 million with no guarantee of benefits exceeding this cost.
APIA’s submission says any new measures should enable:
- Enhanced information that materially facilitates capacity trading. Requiring information that does not facilitate capacity trading increases costs without contributing to achieving the policy objective.
- Low cost information obligations. Keeping the costs of enhanced information provisions lower than those estimated in the cost-benefit analysis increases the potential for the initiative to deliver a net benefit.
- Full cost recovery. A large portion of the costs of the enhanced information considered in the cost-benefit analysis would be borne by pipeline operators. However, the potential benefits accrue to other market participants, primarily those participating in capacity trading, making it appropriate that pipeline operators can recover their costs.
See the APIA submission.