Good engagement brings lower gas charges for NSW households

gas burners

The Public Interest Advocacy Centre welcomes the Australian Energy Regulator’s (AER) announcement that NSW households and small businesses will pay less to have their gas delivered over the next 5 years.

The AER on Friday made its final determination on Jemena Gas Network’s (JGN) access and pricing arrangement for 2020-25, signalling a drop in residential gas network charges of around 8.3% for coastal customers and 6.8% for regional customers for the coming financial year.

PIAC welcomes the outcome and commends JGN on thoroughly engaging with its customers, consumer advocates and the regulator to reduce prices in a sustainable way. This early engagement with stakeholders like PIAC allowed a number of issues to be addressed before formal proposals were put to the regulator.

‘Friday’s decision is good news for the many NSW households who struggle with high gas prices,’ said Craig Memery, Head of Energy Policy at the Public Interest Advocacy Centre. ‘It reflects JGN’s high-quality consumer engagement.’

As well as approving lower gas network charges for NSW households, the AER denied JGN’s request for accelerated depreciation of some of its gas network assets. Accelerated depreciation is increasingly being sought by gas network owners to pass on to consumers the risk of asset stranding due to a transition away from gas.

‘Accelerated depreciation transfers risk from regulated asset owners in the long term, to their customers in the short term,’ said Mr Memery. ‘It’s not reasonable to expect customers to foot the bill for the full risk that JGN do not have a product in the future.’

The AER’s decision not to allow accelerated depreciation is a win for consumers.

‘The AER’s decision on accelerated depreciation sets a welcome precedent as energy networks seek to avoid some of the long-term risks associated with their investment at the expense of consumers,’ said Mr Memery.

With the regulator and JGN having done the hard work, we now look to energy retailers to do the right thing and pass on these savings to consumers.

MEDIA CONTACT: PIAC Energy Communications Officer, Anna Livsey: 0478 739 280

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