Emily Wood | July 3, 2018
The Energy Users’ Association of Australia (EUAA) has welcomed today’s release of the final report into key gas market reforms by the Australian Energy Market Commission (AEMC) that will help put downward pressure on gas prices for consumers.
The Review into the Scope of Economic Regulation Applied to Covered Pipelines Final Report makes numerous recommendations that will strengthen gas pipeline governance, improve gas pipeline access arrangements, provide a clearer pathway to determining more efficient costs and enhance information provision and negotiation power of users of gas infrastructure.
“The AEMC are to be congratulated for the thorough stakeholder engagement process they have undertaken which has allowed them to gain a more complete picture of the issues faced by gas shippers and energy users,” said EUAA CEO, Andrew Richards.
The EUAA and its members have long felt that information asymmetry and ineffective regulatory oversight has resulted in the negotiation scales being tilted too heavily in favour of gas pipeline owners resulting in higher prices than necessary for energy users.
This situation has been confirmed on numerous occasions by the ACCC including in the landmark 2016 report into the east coast gas market.
“We are delighted to see that the AEMC have also recognised these issues are material, as have the ACCC on many previous occasions, and have recommended actions that will begin to level the playing field between pipeline owners, shippers and energy users.”
“It is crucial we get the balance right. We need more investment in gas production and pipeline capacity but we also need to continue to examine and scrutinise all links of the gas supply chain to ensure each step is as efficient as it can be and that all efforts are made to increase transparency and competition.”
“At the end of the day, if gas is too expensive to use then many of these pipeline assets will sit there rusting away as gas intensive manufacturing will move offshore, and nobody wants to see that.”
The EUAA represents members that deliver essential items to the Australian community every day. Their activities include food processing, plastics manufacturing, mining for raw materials, brick making, glass manufacturing, and healthcare.
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