19/01/2012 - 11:38

Gas pipeline operator appeals ERA decision

19/01/2012 - 11:38

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The operator of the Dampier to Bunbury natural gas pipeline has lodged an appeal with the Australian Competition Tribunal regarding the state Economic Regulation Authority’s proposed access arrangements.

Dampier to Bunbury Pipeline (DBP) chief executive Stuart Johnson said there were some aspects to the ERA’s final decision issued in October last year that weren’t acceptable to DBP.

“While we are satisfied that the regulator has accepted most of the $1.8 Billion DBP has invested in expanding the pipeline since 2005, there are a number of matters DBP believes should be raised,” Mr Johnson said.

Mr Johnson said a major concern was the rate of return allowed by the ERA.

“We do not believe that the rate of return set by the regulator reflects the prevailing conditions in the market for funds and the risks involved in providing the services on the pipeline – this is one of the core principles of the law governing gas transmission and is crucial both for the existing business and for attracting new capital for future investment in WA’s infrastructure.”

Other matters that DBP has challenged include the measure for inflation applied by the ERA, the ERA’s refusal to allow approximately $7 million in previous capital expenditure and $6 million in future spending, and the type of service that should be classified as a regulated reference service.

Mr Johnson said he expected the tribunal to make its decision on the appeal in the second half of this year.

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