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Introduction of Competition
South Australia and Western Australia are signatories to the Natural
Gas Pipelines Access Agreement of 7 November 1997. This Agreement
provides for third party access to gas pipeline infrastructure
and sets out the committed schedule for competitive markets
for the sale and supply of gas. The Agreement is consistent with
the existing
energy policy of both States for the implementation of full retail
competition in their natural gas retail markets.
To facilitate the implementation of practical Full Retail Contestability
(FRC), the governments of South Australia and Western Australia implemented
new legislation
that allows ‘schemes’ to be established for the operation
of the state-based gas markets. These schemes include a legal relationship
between the members of the schemes (including gas retailers and gas
distribution network operators), an independent entity to manage
the
scheme and a set of rules covering the requirements and processes
for practical FRC.
The entities who operate the schemes are required to be independent
of the commercial outcomes of the markets, but may be owned by companies
who are involved in the commercial outcomes of the markets. The governments
expect these entities to recover costs on a cost recovery basis from
their members who are involved in gas retailing. The governments,
either themselves or through regulatory authorities, will oversee
the operation of the schemes and managing entities.
The entities created to operate these schemes are known as 'Retail
Market Administrators‘. Gas retailers and distribution network
operators in these States are required to be members of a scheme.
Gas shippers and pipeline operators also have obligations in the rules
associated with these schemes and become parties to the schemes through
either the legislation or subordinate regulations.
The market participants in South Australia and Western Australia worked
together with the respective governments in preparation for the implementation
of practical FRC in these states. Once the policy objectives became
clear in these states, and the requirements of the Retail Market Administrators
were suitably defined, AGL (Energy Sales & Marketing), AlintaGas
Networks, Alinta Sales, Envestra, Origin Energy (Retail) and TXU (Retail)
(now TRUenergy) established the Retail Energy Market Company Ltd (REMCo)
to be a Retail Market Administrator in both South Australia and Western
Australia.
REMCo was incorporated on 8 January 2003.
Membership of REMCo is open to all gas retailers and distributors
operating in South Australia and Western Australia. Since incorporation
the Simple Energy, Synergy, Santos Direct and Premier Power have become members of REMCo. |
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