This was an application before the Australian Competition Tribunal under s 245 of the National Gas Law for a review of a reviewable regulatory decision made by the Economic Regulation Authority (ERA) in relation to WA Gas Networks gas distribution system pursuant to rule 64 of the National Gas Rules. The matter was heard on the papers and the applicant, Alinta was granted leave to apply for review of the decision of the ERA published on 28 April 2011 in relation to the WA Gas Networks Pty Ltd Gas Distribution System.
WA Gas Networks Pty Ltd (WAGN) owns and operates a gas distribution system (GDS) in Western Australia. It comprises various connected and non-interconnected sub-networks covering the Perth metropolitan area and country centres from Geraldton in the north to Busselton in the south. It excludes the Kalgoorlie and Albany networks.
The decision is a "reviewable regulatory decision" as defined in s 244 because it is an "applicable access arrangement decision" and a "full access arrangement decision" as defined in s 2. The Reviewable Decision, by an earlier decision of the ERA published on 28 February 2011 (the Final Decision) made revisions to an access arrangement in place of revisions to an access arrangement submitted to the ERA under s 132 of the NGL by WAGN which the ERA did not approve.
WAGN has itself applied under s 245 of the NGL for leave for review of the Reviewable Decision. That leave has been given in a separate decision of the Tribunal given at the same time as this decision: WA Gas Networks Pty Ltd (No 1) [2011] ACompT 14.
The Tribunal indicated in a separate but related decision of WA Gas Networks Pty Ltd (No 2) [2011] ACompT 15 why it considered that the Reviewable Decision was a reviewable regulatory decision under s 245 of the NGL, and why it granted leave for review to WAGN, stating these reasons as being:
- the grounds it raised fell within s 246;
- its application was within time under s 247;
- the particular matters to be argued by WAGN were each matters which gave rise to a serious issue to be heard and determined in accordance with s 248;
- the statutory threshold prescribed by s 249 was met; and
- there was no other reason under ss 250 and 251 why leave to review should not be granted.
As far as Alinta is concerned, the effect of the Reviewable Decision is that, from the commencement date of 1 July 2011, there will be a higher reference tariff for the B3 reference service for 2011-2012, while the increases thereafter during the operating term of the Reviewable Decision would be limited by the annual CPI movements. Alinta Sales claims the standing to apply under s 245 of the NGL as an effected or interested entity because, under s 244(b) it is a user and end user whose commercial interests are materially affected by the Reviewable Decision. It is a party to contracts with WAGN for the transportation of natural gas through the GDS, and it then on sells that gas primarily to domestic consumers of that gas.
The ERA has raised the question whether Alinta Sales should be permitted to make the application having regard to s 250 of the NGL. Section 250 provides that the Tribunal must not grant leave under s 245(1) if Alinta Sales:
- did not make a submission or comment in relation to the making of the reviewable regulatory decision under review following an invitation to do so; or
- made such a submission or comment that was late and was not taken into account in the making of the decision.
The Tribunal was satisfied that Alinta Sales was an affected or interested party whose commercial interests are materially affected by the Reviewable Decision. Its application has been made within the time specified by s 247.
As to the ERA's section 250 argument, the Tribunal was satisfied that Alinta Sales (the Applicant) had made submission or comment in relation to the making of the reviewable regulatory decision under review following an invitation to do so, despite the ERA's contention that it was Alinta Pty Limited (Alinta Sales is a wholly owned subsidiary of Alinta Pty Ltd (Alinta)). Alinta Sales says that Alinta made submissions on behalf of itself and Alinta Sales as its subsidiary in relation to the Reviewable Decision and to the processes leading up to it. Alinta Sales asserts that the submissions of Alinta were made on its behalf. This submission was based upon the circumstances including the fact that Alinta Sales is a subsidiary of Alinta and The Manager Regulatory Affairs of Alinta, by affidavit, has confirmed that fact. The Tribunal accepted this and distinguished this case from a situation where an applicant is seeking to derivatively benefit from the submissions of an unrelated or independent body for its status under s 245.
The Tribunal went on to consider the substantive issues raised in Alinta's application and determined that matters argued gave rise to a serious issue to be heard that the ERA decision was unreasonable in respect of the timing or phasing in of the increased distribution tariffs. It also determined that s 249 did not apply and granted leave to apply for review accordingly.
