The AEMC today announced a new rule to give the Australian Energy Regulator (AER) and the Economic Regulatory Authority of Western Australia (ERA) more flexibility when regulating efficient prices for natural gas pipeline services.

The Reference Service and Rebateable Service Definitions rule gives the AER and the ERA some discretion in deciding which gas transportation services should attract reference tariffs – allowing the regulator to respond to changing industry circumstances when setting these tariffs at levels which reflect the efficient cost of service delivery.

The rule will apply from 2 May 2013.

It allows the regulator to recognise that in some circumstances it may be better to let market mechanisms determine the price of a regulated pipeline service – particularly when the service is in demand by a significant number of market participants.

The Commission has determined that this rule supports the long term interests of consumers by changing the definition of reference service so that efficient costs can be identified and efficient tariffs set for the service. This determination is another change to the rules which is focused on improving regulatory efficiency so that consumers do not pay more than necessary for their natural gas supply.

This rule change request was made by the AER.