Date:11.35 AM THURSDAY, 18 June 1998
Member:Barnett, Mr Colin
Page:4271 / 1

It is intended that when full competition in gas exists for south west and mid west residential and small business consumers, the existing "uniform tariff" approach will become a maximum delivered price approach.

The desired outcome is for all of these customers to be valued customers for the organisations competing for their business. This would be facilitated if there were a uniform cost of transporting gas via transmission and distribution systems to each of these customers. This is clearly not the case given the geographic spread of these systems. In assessing access arrangements under the code the regulator will be obliged to take into consideration these different costs as well as a variety of other factors in setting reference tariffs across each system.

For this reason clause 37 clarifies for the regulator that one of those factors to consider is the extension of effective competition in the supply of gas to domestic and small business customers. Acting independently, the regulator is therefore expected to give proper consideration to the impact reference tariffs may have on the supply of gas to the small consumer end of the market and to seek a pipeline tariff outcome that enhances competition between suppliers of gas services to the small consumer sector. The Government envisages such an outcome to provide for small consumers a single gas distribution tariff across an individual distribution area. The regulator is permitted to delegate functions and powers. Provisions are made for the appointment of an acting regulator, and for the regulator to resign.
The regulator may employ staff under the Public Sector Management Act. Public service employees can also be assigned, with the agreement of the regulator, to work in the office of the regulator. Government agencies can be engaged, with the agreement of the regulator, to perform administrative and support services for the office of the regulator.

The regulator will open and maintain a bank account. Money may be appropriated by Parliament and the regulator may borrow money from the Treasurer for the purposes of that office. It is intended, however, for the gas industry to pay the costs of the regulator under a user pays principle.

The Minister will annually set a general expenditure limit for the regulator and the regulator will be able to incur expenditure within that limit as he/she deems appropriate. The division provides for financial management by the regulator and for the provisions of the Financial Administration and Audit Act to apply in respect of the regulator’s operations. Immunity provisions are made for acts or omissions in good faith in the exercise of official powers or functions by the regulator.

Division 2 of part 6 establishes and provides for the composition of the Western Australian gas review board as the appeals body under the code. Division 2 requires the Governor to establish panels of legal practitioners and experts. The review board will constitute, from time to time as the need arises, a legal practitioner selected by the Attorney General from the panel of legal practitioners and two experts chosen by the legal practitioner from the panel of experts.

Division 2 sets out the principles governing hearings by the review board and its powers and procedures. Immunity is conferred on any member of the review board or the registrar of the review board for an act or omission, in good faith and in the exercise of official powers or functions.

Division 3 of part 6 creates the Western Australian gas disputes arbitrator. The administrative arrangements for the arbitrator will be similar to those already described for the regulator. However, it is important to note that the arbitrator will not only perform functions and powers under the gas pipelines access law but will also have the functions and powers of the gas referee established under the Gas Referee Regulations 1995. Consequently, the arbitrator will be able to also hear contractual disputes with regard to the Dampier to Bunbury natural gas pipeline and the AlintaGas distribution system under their respective legislation. This will avoid duplication and is another example of the law being modified to suit Western Australian circumstances.

The same independence, financing and immunity provisions will apply to the arbitrator as will apply to the regulator. Unlike the regulator, the arbitrator will not appoint permanent staff, but Public Service employees can be assigned, with the agreement of the arbitrator, to work in the office of the arbitrator. The arbitrator will support the gas review board and will be responsible for the financial management of the board. It should be noted that the board does not hear any appeals against the arbitrator and, therefore, its administrative accountability to the arbitrator does not constrain or impair its independence.

Division 4 of part 6 provides for regulations to be made by the Governor prescribing all matters necessary for the purposes of the Bill. The regulations may prescribe for pipeline operators to pay fees to the regulator, such fees to be determined on a non-discriminatory basis and reflecting recoupment of costs, for the funding in part or whole of the regulator on an ongoing net appropriation basis. Fees and charges may also be prescribed for the purposes of the arbitrator and the gas review board.

Part 8 contains transitional arrangements to apply in Western Australia as allowed under the natural gas pipelines