It has been delayed because the initial draft, which was designed with little input from industry, was anathema to APIA members. After a strong push by industry, the government withdrew the draft, delayed the planned introduction date for the legislation, and redrafted the Law and the Rules. The original draft would have introduced intrusive regulatory policies that would have stymied future investment in gas transmission pipelines.
The Rules that accompany the legislation, at the time of writing, were still being developed. However, after consultation, officials have indicated that APIA’s concerns will be incorporated and the outcome should not lead to a more onerous regulatory environment.
It has been a long road leading to the final legislation to ‘streamline’ Australia’s energy regulation processes. At the beginning of the review of the Gas Code, APIA had hoped to improve the circumstances for our owner and operator members. But, during the process, it became clear that the regulators planned to introduce more onerous procedures than had ever been contemplated by the gas transmission industry. One reason for such an outcome was the ‘streamlining’ itself. The legislation ‘streamlines’ regulations covering electricity and gas, transmission and distribution. Traditionally, the electricity industry (and, to a certain extent, the gas distribution industry) have had more intrusive regulations, so in bringing the four energy sectors under the same regulations compromises have been made. Of course, each time there is a compromise, the gas transmission industry ends up with more intrusive regulation.
An example is Merits Review. There was a push by the regulator, some time ago, to remove the right of review altogether. And the electricity industry did not have access to Merits Review but wanted to gain access. After a strong fight, Merits Review was retained, but new restrictions have been introduced. So, while the gas transmission industry has retained access to the right of review, it will be a more restricted right.
The process of developing the new laws has meant this industry has fought to maintain what we already had rather than work on a better outcome. We have worked hard to avoid ending up in a more difficult regulatory situation which could damage this vibrant and dynamic industry in the longer term. While the final legislation will not be better than what has existed and developed over the past decade, at least it is not as bad as it might have been.
