by the COAG Energy Council, however the proposed market structure did receive in principle support at the August 2016 COAG Energy Council meeting. It is anticipated that the Victorian Government, and the COAG Energy Council, will make a policy decision on whether to develop new market arrangements in Victoria in 2017. If they do decide to develop new arrangements, there will be a significant period of policy and market development, including drafting and passage of new legislation, development or new market rules, procedures and arrangements, as well as the need to develop and test new market systems. It is also expected that there will be a period for the market before the new market arrangements (if agreed) are ultimately enacted. During the lead up to the commencement of new market arrangements, APA VTS expect to incur significant costs. As the service provider of the transmission system, new market arrangements are likely to require investment in new systems as well as the development of new procedures. In addition, the process of developing new market arrangements, in particular through representation on working groups and panels, is likely to be drawn out and costly for APA VTS. Indeed, this process can be expected to run for several years. These costs cannot be adequately forecast for the access arrangement period. Not only has no policy decision been made to proceed with developing or implementing new market arrangements, the scope of changes, if they are developed, are not currently known. Further, it is unlikely that they will be known before the access arrangement starts, even if a policy decision is made in early 2017 to develop new arrangements. This is because it is the detail of requirements for new systems, procedures and arrangements that drive costs, and these are only likely to be considered and confirmed late in the development process. APA VTS considers that the efficiently and prudently incurred costs associated with the development and implementation of new market arrangements in Victoria should be able to be passed through during the access arrangement period. This includes costs incurred in the development of new systems, process and procedures made necessary by a decision to develop a new gas market structure, which includes costs incurred prior to a decision to implement the new market arrangements, or the start of the new
by the COAG Energy Council, however the proposed market structure did receive in principle support at the August 2016 COAG Energy Council meeting. It is anticipated that the Victorian Government, and the COAG Energy Council, will make a policy decision on whether to develop new market arrangements in Victoria in 2017. If they do decide to develop new arrangements, there will be a significant period of policy and market development, including drafting and passage of new legislation, development or new market rules, procedures and arrangements, as well as the need to develop and test new market systems. It is also expected that there will be a period for the market before the new market arrangements (if agreed) are ultimately enacted. During the lead up to the commencement of new market arrangements, APA VTS expect to incur significant costs. As the service provider of the transmission system, new market arrangements are likely to require investment in new systems as well as the development of new procedures. In addition, the process of developing new market arrangements, in particular through representation on working groups and panels, is likely to be drawn out and costly for APA VTS. Indeed, this process can be expected to run for several years. These costs cannot be adequately forecast for the access arrangement period. Not only has no policy decision been made to proceed with developing or implementing new market arrangements, the scope of changes, if they are developed, are not currently known. Further, it is unlikely that they will be known before the access arrangement starts, even if a policy decision is made in early 2017 to develop new arrangements. This is because it is the detail of requirements for new systems, procedures and arrangements that drive costs, and these are only likely to be considered and confirmed late in the development process. APA VTS considers that the efficiently and prudently incurred costs associated with the development and implementation of new market arrangements in Victoria should be able to be passed through during the access arrangement period. This includes costs incurred in the development of new systems, process and procedures made necessary by a decision to develop a new gas market structure, which includes costs incurred prior to a decision to implement the new market arrangements, or the start of the new
APA%20VTS-VTS%20Revision%20Proposal%20submission-20170103-Public.docx