The AER is responsible for the economic regulation of covered natural gas distribution and transmission pipelines in all states and territories except Western Australia. The AER is currently conducting a review of the revised access arrangements of the three Victorian gas distribution networks, including Envestra, and the Victorian gas transmission network. The National Gas Law (NGL) and National Gas Rules (NGR) provide the overarching regulatory framework for the gas distribution and transmission sectors.
The Victorian gas distribution networks are subject to full regulation, which requires a service provider1 to submit an initial access arrangement to the AER for approval, and to revise it periodically (typically every five years). The access arrangement sets out the terms and conditions on which third parties can access the distribution pipeline.2
Overview of the service provider
Envestra Limited is a publicly listed company that owns natural gas distribution networks across Australia. Envestra owns around 23 000 kilometres of natural gas distribution networks serving over 1.1 million customers in Victoria, South Australia, Queensland, New South Wales and the Northern Territory.
Envestra's Victorian gas network includes the distribution mains, inlets, meters, regulators and ancillary equipment that are used to provide pipeline services in Victoria. It serves the northern, outer eastern and southern areas of Melbourne, Mornington Peninsula, rural communities in northern, eastern and north-eastern Victoria, and south-eastern rural townships in Gippsland. Envestra's Victorian gas network comprises around 9900 kilometres of mains delivering gas to around 575 000 customers.
Envestra's Albury gas network includes the distribution mains, inlets, meters, regulators and ancillary equipment that are used to provide pipeline services. It serves the city of Albury and its environs, extending to Jindera to the north of Albury. Envestra's Albury gas network delivers gas to around 20 000 customers.
Figure 1.1 Map of the Victorian gas distribution and transmission networks
Regulation prior to 1 July 2008
The Essential Services Commission of Victoria (ESCV) made the previous determination on Envestra's access arrangement for the period 1 January 2008 to 31 December 2012. The ESCV made its determination in accordance with the provisions of the National Third Party Access Code for Natural Gas Pipeline Systems (the Code).
Responsibility for the regulation of Victorian gas networks transferred from the ESCV to the AER on 1 July 2008 as part of the move towards the national regulation of the energy market. This current determination process is the first full assessment by the AER of the access arrangements of the Victorian gas distribution businesses under the NGL and the NGR.
