STABLE GAS NETWORK CHARGES FOR VIC/NSW

The Australian Energy Regulator (AER) is seeking feedback on its draft decisions on the revenue that gas networks can collect from their consumers in Victoria and the Albury region of NSW through network charges for the 2018-22 period.

AER Chair Ms Paula Conboy said implementation of the draft decisions would lead to an estimated fall in the networks component of an average annual gas bill in Victoria and Albury of between $9 and $23 from 1 January 2018.

“The draft decisions released today aim to achieve value for money for these gas customers whilst enabling the pipeline businesses to invest in and deliver long-term safe, secure and reliable gas supplies,” Ms Conboy said.

“Gas transmission and distribution pipeline costs in Victoria and Albury make up around 20-25 per cent of residential customers’ bills and around 14-18 per cent of small business customers’ bills.

“While the impact of these decisions would be relatively small, any reduction in network charges avoids adding further pressure to household and business budgets when many Australians are concerned about rising energy costs,” Ms Conboy said.

“Australia’s changing gas market is driving significant investment by some pipeline operators. While in many cases this investment is necessary, it is important we ensure these investments are appropriate so pipeline costs aren’t adding unreasonably to gas bills.

“We are also strengthening incentives for gas network businesses to find more efficient ways to operate and maintain their networks.

The AER assessment shows that improvements in the investment environment since revenue allowances were last set in 2012 have reduced financing costs necessary to attract efficient investment, which would result in savings to customers if the draft decision is implemented in full.

The draft decisions have been developed in consultation with stakeholders and the AER’s technical experts and Consumer Challenge Panel. Gas network businesses will submit revised proposals in response to these draft decisions by 14 August 2017. Interested parties are invited to make submissions on both the draft decisions and revised proposals by 15 September 2017. Final decisions are expected in November.