The current trend in national and state regulatory decisions is making investment in price-regulated assets less attractive, according to APA Group Managing Director Mick McCormack.
At the APA Group 2012 Annual Meeting, Mr McCormack said that national and state regulators involve themselves in the gas transmission sector primarily to protect against unreasonable prices being charged by pipeline owners, but that this important role can lead to “a short-sighted approach”.
Article continues below…
“Its application can jeopardise further investment and therefore growth in the sector, ultimately to the detriment of the domestic economy,” said Mr McCormack. “Through their role in approving the pricing of services on a regulated pipeline, the regulators effectively set the return on investment that is available to pipeline owners.”