Australian Capital Territory
Utilities (Gas Network Capital Contributions Code) Approval 2007
Disallowable instrument DI2007–203
made under the  
Utilities Act 2000, s 58 (Approved codes)

1	Name of instrument
This instrument is the Utilities (Gas Network Capital Contributions Code) Approval 2007.
2	Commencement 
This instrument commences on the day after notification.
3	Approval of code
The Commission approves the Gas Network Capital Contributions Code set out in the attachment.
4	Public access to documents
Copies of the Gas Network Capital Contributions Code are available for inspection by members of the public between 9:00 am and 5:00 pm, Monday to Friday, at the Commission’s offices at Level 2, 12 Moore Street, Civic ACT, and on the Commission’s website (www.icrc.act.gov.au). Copies of these documents can be made at the Commission’s offices. Electronic copies are available on request. No charge will apply.

Paul Baxter
Senior Commissioner
for the Independent Competition and Regulatory Commission
14 August 2007

ATTACHMENT

 ICRC
independent competition and regulatory commission

Gas Networks Capital
Contribution Code
August 2007

TABLE OF CONTENTS
	Page
PART 1	APPLICATION, PURPOSE AND EFFECT OF THIS CODE	1
1.1	Application	1
1.2	Purpose	1
1.3	Ownership of Infrastructure	1
PART 2	DICTIONARY	1
2.1	Dictionary Attached	1
PART 3	GENERAL PRINCIPLE FOR CALCULATION OF CAPITAL CONTRIBUTION CHARGES	1
PART 4	EXTENSION OF GAS DISTRIBUTION NETWORK TO ALLOW LATER CUSTOMER CONNECTION	1
4.1	General	1
4.2	Standard extension of a Gas Distribution Network	2
4.3	Capacity of Gas Distribution Network Infrastructure	2
4.4	Determination in relation to extension of a Gas Distribution Network	2
4.5	Non-standard extension of a Gas Distribution Network	3
PART 5	CONNECTION OF PREMISES TO EXISTING GAS NETWORK	3
5.1	General	3
5.2	Standard connection to a Gas Network	4
5.3	Capacity of connection to Gas Network	4
5.4	Determination in relation to conditions for connection to a Gas Network	4
5.5	Non-standard connection to a Gas Network	5
Part 6	REDEVELOPMENT OF LAND	5
PART 7	REMOVALS AND RELOCATIONS	5
Part 8	DICTIONARY	6

PART 1		 APPLICATION, PURPOSE AND EFFECT OF THIS CODE
1.1	Application
This Code applies to Gas Distributors and Gas Suppliers.
1.2 Purpose
The purpose of this Code is to outline the principles and procedures by which a Gas Distributor or a Gas Supplier may impose a Capital Contribution Charge payable by a Customer in relation to the Costs incurred by the Gas Distributor in developing or augmenting its Gas Network.
1.3	 Ownership of Infrastructure

The payment of a Capital Contribution Charge does not confer on the person paying that charge any ownership in, or other legal or equitable right in respect of, any Infrastructure to which that charge may relate.

PART 2 DICTIONARY

2.1 Dictionary Attached

The dictionary at the end of this Capital Contribution Code is part of this Code.

PART 3 GENERAL PRINCIPLE FOR CALCULATION OF CAPITAL CONTRIBUTION CHARGES

A Gas Distributor or a Gas Supplier may charge, and a Customer must pay, a Capital Contribution Charge for the development or augmentation of its Gas Network undertaken to provide Utility Services to a Customer.  
The amount of the applicable Capital Contribution Charge may not exceed the amount calculated in accordance with the principles outlined in the following clauses 4, 5, 6 and 7.

PART 4 EXTENSION OF GAS DISTRIBUTION NETWORK TO ALLOW LATER CUSTOMER CONNECTION
4.1 General
This clause 4 applies to the extension of the boundaries of a Gas Distribution Network for the purposes allowing later connection to that network of Premises on parcels of land being or to be developed and not already connected to a Gas Network.
4.2 Standard extension of a Gas Distribution Network
A Gas Distributor will, at no charge to a Customer who is a land developer, install Infrastructure to extend the Gas Distribution Network from its existing boundary to and through land being or to be developed on condition that:
(a)	there are no unusual site conditions; and
(b)	the network revenue from the load likely to arise from that distribution infrastructure is not likely to be uneconomic.
4.3 Capacity of Gas Distribution Network Infrastructure
Infrastructure installed in accordance with clause 4.2 will be of a capacity assessed by the Gas Distributor as reasonable to meet requirements which the Gas Distributor considers likely to arise from later connection of detached or semi-detached Premises on, or to be constructed on, the land and used for residential purposes.
This clause applies unless the Gas Distributor is specifically required by law to construct Infrastructure of a particular type or capacity on that parcel of land.
4.4 Determination in relation to extension of a Gas Distribution Network
On request by a Customer who is a land developer for extension to a Gas Distribution Network, a Gas Distributor may determine:
(a)	whether there are unusual site conditions;
(b)	that the network revenue from the load likely to arise from that distribution infrastructure is likely to be uneconomic; and
(c)	that the Premises on or likely to be constructed on the land being or to be developed require the installation of Infrastructure of a capacity greater than that reasonably required to allow the later connection of detached or semi-detached residential Premises.  
In making such determinations, a Gas Distributor must relevantly:
(a)	consider site conditions including (but not limited to) natural or man-made obstacles, terrain, vegetation and location;
(b)	conduct an economic evaluation using a discounted cash flow model having regard to the network revenue from the load likely to arise from connections likely to be made to that part of the network comprising the requested extension;
(c)	consider planning and land management applications made, or approvals given, in respect of the land.

4.5 Non-standard extension of a Gas Distribution Network
Unusual site conditions
If a Gas Distributor determines that there are unusual site conditions and a Customer who is a land developer still requires an extension to the Gas Distribution Network, the Capital Contribution Charge may be an amount up to the difference between the Costs which the Gas Distributor would otherwise have incurred but not charged to a Customer under clause 4.2 and the actual Costs of the work.
Uneconomic extension
If a Gas Distributor determines that likely network revenue would render an extension to the Gas Distribution Network uneconomic and a Customer  who is a land developer still requires the extension, the Capital Contribution Charge may be an amount up to the shortfall between the extent to which the connection is uneconomic compared to the required rate of return based upon the economic evaluation contemplated by clause 4.3.
Non standard capacity
If:
(a)	a Gas Distributor determines that Premises likely to be constructed on land being or to be developed require the installation of Infrastructure of a greater capacity than that assessed as reasonable under clause 4.3; or
(b)	a Customer requires the installation of Infrastructure of a greater capacity than that assessed as reasonable under clause 4.3,
the Capital Contribution Charge may be an amount up to the difference between the Costs which the Gas Distributor would otherwise have incurred but not charged to a Customer under clause 4.2 and the actual Costs of the work.  
PART 5 CONNECTION OF PREMISES TO EXISTING GAS NETWORK
5.1 General
This clause 5 applies to the development or augmentation of a Gas Network to:
(a)	connect Premises to already installed Infrastructure; or
(b)	vary the capacity of the connection between those Premises and the Gas Network.
This clause 5 applies whether:
(a)	the connection or variation of capacity service is requested by a Gas Supplier or another Person; or
(b)	the Gas Supplier or another Person pays the Capital Contribution Charge.
5.2 Standard connection to a Gas Network
A Gas Distributor will, at no charge to a Customer:
(a)	connect a Premises to already installed Infrastructure; or
(b)	vary the capacity of the connection between those Premises and the Gas Network
if the Gas Distributor determines that:
(a)	the connection would be located adjacent to existing suitable Infrastructure; and
(b)	there are no unusual site conditions.
5.3 Capacity of connection to Gas Network
The connection referred to in clause 5.2 will be of a capacity assessed by the Gas Distributor as reasonable for detached or semi-detached Premises used for residential purposes.
This clause applies unless the Gas Distributor is specifically required by law to construct Infrastructure of a particular type or capacity on that parcel of land.
5.4 Determination in relation to conditions for connection to a Gas Network
On receipt of a request to connect a Premises to its Gas Network, a Gas Distributor may determine whether:
(a)	the connection would be located adjacent to existing suitable Infrastructure;
(b)	there are unusual site conditions; and
(c)	the Premises require a gas connection of a greater capacity than that referred to in clause 5.3.  
In making such determinations:
(a)	a connection requiring pipelines of up to a maximum of 25 metres from the existing suitable Infrastructure to a meter on the Premises may be considered adjacent;
(b)	unusual site conditions may include natural or man-made barriers (such as rock, driveways and retaining walls) which may reasonably be considered to impede excavation for the purpose of laying pipelines; and
(c)	the Gas Distributor must have regard to the permissible purposes for which Premises may be used.

5.5 Non-standard connection to a Gas Network
Where
(a)	a Customer requires a connection of a greater capacity than that assessed as reasonable under clause 5.3; or
(b)	a Gas Distributor determines that:
i.	the connection would not be located adjacent to existing suitable Gas Network Infrastructure; or
ii.	there are unusual site conditions; or
iii.	the Premises to be connected require a gas connection of a greater capacity than that referred to in clause 5.3,
and the Customer still requires the connection,
the Capital Contribution Charge may be an amount up to the difference between the Costs which the Gas Distributor would otherwise have incurred but not charged to a Customer under clause 5.2 and the actual Costs of the work.
PART 6 REDEVELOPMENT OF LAND
If re-development of a parcel of land already connected to a Gas Network necessitates re-development or augmentation of gas distribution or service connection Infrastructure in order to vary the capacity or connection, the Capital Contribution Charge may be equal to the full Costs of that re-development or augmentation plus a reasonable profit margin.
PART 7 REMOVALS AND RELOCATIONS
If a Customer requests a Gas Distributor to remove or relocate Infrastructure, the Gas Distributor may charge, and the Customer must pay, the full Costs plus a reasonable profit margin incurred in removing or relocating such  Infrastructure.
This clause applies regardless of:
(a)	the age or utilisation of the Infrastructure; or
(b)	any previous contribution towards the cost of installing that Infrastructure.
No payment, credit or other allowance will be provided for Infrastructure removed or relocated.

PART 8 DICTIONARY
Act means the Utilities Act 2000.
Capital Contribution Charge means the amount payable in accordance with this Code towards the Costs of making Utility Services available to parcels of land not already connected to a Gas Network or varying the capacity of a connection to a Gas Network.
Costs means the amount incurred by a Gas Distributor in making Utility Services available to parcels of land not already connected to a Gas Network or varying the capacity of a connection to a Gas Network and all necessary ancillary work to adequately protect and operate the resultant Gas Network, including design, labour, materials, plant, transport, overhead and administration costs but not including any profit margin.
Customer  means any Person who acquires services from a Gas Distributor in relation to that Gas Distributor’s Gas Network, and includes, but is not limited to:
i.	a developer of residential, commercial or industrial land;
ii.	a residential, commercial or industrial customer; and
iii.	a Gas Supplier.
Gas Distribution Network has the same meaning as in section 10 of the Act.
Gas Distributor has the same meaning as in the Act.
Gas Network has the same meaning as in the Act.
Gas Supplier has the same meaning as in the Act.
Infrastructure means any infrastructure or other equipment forming part of a Gas Distribution Network within the meaning of section 10 of the Act.
Network means a gas network as defined in the Act.
Network Boundary has the meaning set out in Gas Network Boundary Code.
Person includes a natural person, a firm, an unincorporated association or a body corporate.
Premises has the same meaning as in the Act.
Utility Service has the same meaning as in the Act.