Distribution cost cuts may lead to cheaper gas bills


GAS prices for Mornington Peninsula households are likely to drop between $40 and $185 a year from next year as network charges fall 11 per cent.

This surprising revelation comes as most gas consumers fear increases as a result of soaring exports from the North-West Shelf and Galilee Basin projects in Western Australia and Queensland.

But, for about 650,000 households and small businesses in Victoria and around Albury, NSW – including 150,000-180,000 on the peninsula and in Gippsland – the reverse is expected to be the case.

This follows Australian Gas Networks (AGN) submitting to the Australian Energy Regulator its final plan for a Victoria and Albury access arrangement for the five years from 1 January 2018.

The company is one of Australia’s leading natural gas distribution businesses, owning the infrastructure and pipes through which gas is supplied to households by retailers such as AGL and Energy Australia. Its distribution charges make up about one third of the average domestic retail gas bill.

AGN chief operating officer Andrew Staniford said the AGN plan proposed an 11 per cent cut in gas distribution charges from the beginning of next year. He said the charges made up about a third of the average residential bill in Victoria.

The company estimates the flow-on effect of its cuts will slash household gas bills by $40-$185 annually “assuming other components of the bill do not change”.

Mr Staniford said the cost cuts were based on lower interest rate charges which the company had managed to fix over a five-year period. These come into effect when the regulator approves the company’s final plan next month, he said.

“Our proposed reduction in the network charges will take some of the pressure off household and small business gas bills,” he said.

“The price drop will improve the affordability of natural gas for our new and existing customers.

“We are very conscious that the cost of living – including utility bills – is a major concern for many people.”

The energy regulator will hold a public forum on AGN’s final plan on 1 February before handing down its draft decision in June. AGN will then have an opportunity to submit a revised final plan before the regulator releases its final decision on 30 November.

First published in the Southern Peninsula News – 17 January 2017


Comments are closed.