In March 2008, Gas Industry Co made two recommendations to the Minister: the first recommended the making of the rules to improve the allocation and reconciliation of downstream gas quantities; the second recommended associated amendments to the Gas Governance (Compliance) Regulations 2008 to promote compliance with, and enforcement of, the Rules.
Gas Industry Co had identified a number of problems with the design of the existing downstream reconciliation arrangements (under the Reconciliation Code), including a lack of specificity in the arrangements, a lack of proper governance and no workable means of enforcing compliance.
Improved arrangements, in the form of the rules to approved under the Gas Act, were developed over the period since 2006 through the operation of an industry working group (the GART), the release of several consultation papers, two consultant reports, and a further industry workshop.
Through these mechanisms the issues were extensively canvassed with the industry. In particular, improved downstream allocation and reconciliation arrangements ensure that UFG is more equitably allocated to its retailers, thereby enhancing the competitiveness of the retail market. Improved arrangements also benefit consumers through a reduction in industry participants' operational costs and an increase in the potential for retail competition leading to greater productive, allocative and dynamic efficiency.