The Minister for Financial Services and Regulation, Joe Hockey, today helped to promote greater competition in the NSW and Victorian gas industries by certifying as effective their Third Party Access Regimes for Natural Gas Pipelines.
The NSW and Victorian Regimes will be certified for 15 years, providing infrastructure owners, operators and users a degree of certainty in the regulatory environment, especially when developing new infrastructure.
"This decision will help boost competition in the natural gas industries in both States. Greater competition means significant benefits for business and households, including lower prices, improved choice and better service quality", the Minister said.
The access regimes provide the legal means for third parties, like gas retailers and industrial users, to negotiate fair access to the States' pipelines. This sort of infrastructure usually involves substantial set-up costs, but is relatively cheap to use once constructed.
"The certification of these regimes will help provide incentives for pipeline owners in NSW and Victoria to both expand the market and provide innovative and competitive services," the Minister said.
The NSW and Victorian regimes are based on the National Gas Access Regime and comply with National Competition Principles. The National Regime aims to develop a fully integrated national gas market, allowing gas to be freely traded across jurisdictions. It has already facilitated the development of the Eastern Gas Pipeline (from Longford in Victoria to Sydney), which has significantly promoted competition in gas supply.
"The National Gas Access Regime, endorsed in November 1997 by the Council of Australian Governments, is a key component to boosting competition in the natural gas sector and ensuring the best possible use of Australia's gas resources."
The NSW and Victorian Governments submitted their access regimes to the National Competition Council (NCC) for assessment. The NCC recommended that both regimes be certified as effective access regimes under Section 44N of the Trade Practices Act 1974.
Copies of the NCC's recommendations are available at www.ncc.gov.au