The NSW Rail Access Undertaking requires each access provider (including TAHE) to prepare an Overs and Unders Account Policy for the Hunter Valley Coal Network (HVCN) and submit it to IPART for approval.
Schedule 3 Clause 4 of the Undertaking includes the following requirements:
- the access provider should attempt to return the overs and unders account balance to zero each year.
- the overs and unders account should not exceed +/- 5% of forecast access revenue.
- the access provider will develop and publish a policy for the operation of the overs and unders account in consultation with Access Seekers and submit the policy to IPART for approval.
- the access provider will provide an annual reconciliation of each account to the applicable Access Seekers.
The purpose of the Overs and Unders Account Policy is to specify how the access provider (TAHE) will return any over-recovered access revenues to customers. Over-recovered revenues are those that exceed the Full Economic Cost (FEC) ceiling specified in the Undertaking.
TAHE consulted with rail access users and submitted a final draft of its Overs and Unders Policy to IPART in November 2023. The Policy proposed to return the accumulated over-recovery balance to access users over the next two years by setting prices below TAHE’s Full Economic Cost (FEC) for the HVCN.
Beyond 2025-26 TAHE proposed that any single-year under or over-recovery of its FEC up to +/-20% would be returned through price adjustments in the next available pricing year.
TAHE also proposed that the current Overs Account balance and any future over or under recovery would be returned to, or collected from, only coal customers. TAHE provided justification for this approach in a supplementary paper.
IPART published TAHE’s Draft Policy on our website on 1 February for stakeholder comments.
We received only one submission on the Draft Policy. It was from a rail access user and was supportive of TAHE’s consultation and its overs and unders mechanism.
IPART has determined that TAHE has developed the Policy in consultation with stakeholders as required by the Undertaking, specifically Sch 3 Cl4(f).
We have further determined that the Policy meets the requirements of Sch 3 Cl4 of the Undertaking and we therefore approve the policy.