For those interested in reading the documents, the following...

For those interested in reading the documents, the following links may be helpful;

This is the communinique release from the COAG meeting…

http://prod-energycouncil.energy.slicedtech.com.au/publications/8th-coag-energy-council-meeting-communique

“Ministers asked Dr. Vertigan to bring forward his recommendations to allow commencement on 1 May 2017, subject to the passage of amendments to relevant laws, with an update to the Council on progress in February 2017.”

and this is Vertigan’s final report…
http://www.scer.gov.au/sites/prod.energycouncil/files/publications/documents/Examination%20of%20the%20current%20test%20for%20the%20regulation%20of%20gas%20pipelines%20-%20Final%20Report.pdf

CTP’s submissions are scattered thru the report and the company appears to punch above its weight on the issues; check out Pages 41, 42, 48, 52, 53 & 71 for CTP submission references.

Page 13 notes:
“The introduction of binding arbitration to the commercial framework for pipeline negotiation would retain negotiation between parties as the focus for the industry rather than regulatory solutions and would provide the credible threat to address the existence of market power which is required. This approach is consistent with the substantial alignment of interests between the parties and the fact that denial of access is not a significant issue.
This form of resolution is also consistent with the views of the majority of market participants. The pipeline industry and most shippers have little appetite for more onerous regulatory solutions. Rather, it provides shippers with increased negotiating power through the introduction of a credible threat of arbitration that when actioned, can be quickly resolved.”

The 4 basic recommendations are as follows:

Recommendation 1
That the disclosure and transparency of pipeline service pricing and contract terms and conditions be enhanced, including requiring the provision of information on the full range of pipeline services which are available or sought (not solely focused on forward haul services).

Recommendation 2
That a framework for binding arbitration, available to all open access pipelines in the event parties are unable to reach a commercial agreement, be introduced into the National Gas Law (NGL).

The following clauses will be of interest to RC…
4) Arbitration would be commercially-based (as distinct from judicial or regulator based), with the arbitrator appointed by mutual agreement of the parties, but with provision for imposition of an arbitrator where there is no agreement. The framework would be designed for expeditious resolution of the dispute with provisions to avoid delay and gaming. Structures such as ‘final offer arbitration’ would be considered for inclusion.
5) The decision of the arbitrator would be binding on both parties.

Recommendation 3
That the GMRG be tasked with developing a detailed design of the disclosure and transparency requirements and of the arbitration framework, after consultation with industry, other stakeholders, the ACCC, the AER and the AEMC, with recommendations to be considered by the COAG Energy Council in mid-2017.

Recommendation 4
That no change be made to the current coverage test at this stage. The appropriateness of amending the coverage test should be reviewed within five years after the arbitration framework is operational.

The Conclusion notes:
The recommendations seek to reduce the imbalance in negotiating power, constrain the exercise of market power and encourage downward pressure on gas transportation prices.