The Australian gas industry was deregulated in 1997.
This required retailing functions to be tightly 'ringfenced' from the ownership and operation of gas distribution networks. The networks are subject to open access which allows multiple retailers to compete for customers in markets previously considered monopolies.
Overview of Regulatory Regime
In November 1997, the State and Federal Governments signed the Natural Gas Pipelines Third Party Access Agreement which set out the terms and conditions under which deregulation was to occur.
Full retail contestability occurred in Victoria in October 2002, in South Australia in July 2004 and in Queensland from 1 July 2007.
Full retail contestability does not impact Envestra other than the company deals with multiple retailers in each jurisdiction rather than just one as in the past.
The tariffs (cost of transporting the gas) Envestra charges for each class of customer is determined by an Independent Pricing and Access Regulator in each State. The tariffs are linked to CPI and are set for a five year period but can be reviewed earlier if there is a significant change in circumstances affecting the return Envestra is allowed to earn on its assets. Prior to July 2008 Envestra had dealings with the following regulators when reviewing its Access Arrangements.
From 1 July 2008, the Australian Energy Regulator www.aer.gov.au took over responsibility for gas regulation. The introduction of a National Regulator is viewed by Envestra as a positive move as it is likely to bring a more consistent and commercial approach to setting access tariffs.
