Government plans to introduce legislation into Parliament to facilitate the provision of a greater supply of gas to the domestic market at lower cost and encourage greater competition among suppliers.

Under the proposed legislation, Government plans to regulate the make up of gas in the State’s pipeline network and subsequently broaden gas characteristics for the domestic market. The gas specification for pipelines in Western Australia is determined in commercial contracts.

It also plans to undertake a program to make pre-1980 gas appliances safe if operated under a leaner gas.  more >>

Summary of proposed legislation

1. The Governor is to be empowered to set the gas specification on transmission pipelines by regulation.
   
   
2. Gas suppliers will have the choice to incur expenditure to treat the gas to meet the design specification applicable on 30 September 2008 or to supply at the broader specification and to compensate adversely affected parties.
   
   The liability to compensate gas consumers is limited to the expiry of contracts current at 30 September 2008. Disputes as to the level of compensation are to be determined by the Gas Disputes Arbitrator.
   
   The compensation to owners of gas pipelines is to include capital costs and operating costs. It is to be based on the impact of the gas supplier’s gas compared with the design specification at 30 September 2008. Disputes as to the level of compensation to be determined by the dispute resolution procedures used by the pipeline in its typical shipper contracts.
   
   The legislation is to clarify that the pipeline owner will not be required to invest to expand capacity.
   
   
3. Gas suppliers are to provide the prescribed notice (typically around 30 months) to the pipeline owner of the intention to supply gas at the broader specification. This will enable the pipeline owner to only expand capacity when it has a commitment from the gas supplier.
   
   
4. The funding of the program to make pre-1980 appliances safe is to be provided by gas suppliers that supply gas at below the lower boundary of the design specification at 30 September 2008. A levy is to be imposed on gas suppliers that supply this leaner gas and each gas supplier is to pay an equitable share of the total program costs.

Current Status

The Bill is currently being drafted by Parliamentary Counsel. The Office of Energy has invited interested parties to advise of problems or unintended consequences of the proposed legislation.

The gas specification will be determined during the drafting of the regulations, and in consultation with industry and technical experts. The specification, will, however, set the minimum Wobbe Index at 46.0 MJ/m3.

Background

Issues Paper – Public Comments

The Office released the issues paper, Broadening the Gas Specification on Pipelines In Western Australia and invited feedback before close of business on 31 October 2008. Twenty public submissions were received in response to the issues paper.

EnergySafety’s Survey of pre-1980 gas appliances

The Government will also prohibit the use of some pre-1980 gas appliances that could have safety issues.

EnergySafety inspected a sample of pre-1980 gas appliances to determine the number that would have safety issues if the heating value of the gas supply was lowered.

The results of the survey, the statistical extrapolation of the results and the Director of Energy Safety’s recommendations are contained in the document Report on survey to determine the number of pre 1980 domestic gas appliances connected to the Perth metropolitan natural gas distribution system. The report is dated September 2008.

Enquiries

Peter Adams
A/Senior Manager, Industry
Office of Energy
DID: (08) 9420 5654
Tel: (08) 9420 5600
Email: peter.adams@energy.wa.gov.au