Australian Gas Networks plans $34 a year price cut for household supply
Consumers are sick and tired of rising utility prices but light is at the end of the tunnel. First water and power bills were cut – now gas prices are set to fall too.
SA News
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Households would receive an average $34/year cut to gas bills from next year under a plan by Australian Gas Networks.
The company, which operates the pipelines and infrastructure which distributes gas around the state has begun the process which will set its pricing for the five years beginning next July.
It would allow for $580 million of investment in the gas network – including completing the expansion to Mount Barker and connecting the Concordia residential estate and Kingsford Smith industrial precinct in northern Adelaide.
“Price, affordability and supply reliability remain the top priorities for our customers, made all the more important given the economic impact of the COVID-19 pandemic on many customers,” chief executive Ben Wilson said.
“A continued focus on renewable gas in the network is also a final plan priority.
“We are planning to blend renewable gas into our networks, with these low-carbon initiatives being strongly supported by our customers.”
The amount of revenue Australian Gas Networks can make is set in five-year blocks by the Australian Energy Regulator.
The company has asked for $1.15 billion over the five years from July 2021 to June 2026.
The regulator on Friday opened up the AGN proposal for public comment.
The proposed $34 decrease from an average $1033/year bill from 2021 would be slightly bigger than an increase in network charges for this financial year.
Network charges make up about 56 per cent of the bill paid by households with the wholesale cost of gas, retailer margins and other factors making up the rest.
Under the AGN plan average commercial customers would save $335 a year and industrial customers $17,400 a year.
AGN general manager Craig de Laine said extensive engineering and design work had been completed on the Mount Barker project which was first approved by the regulator in December 2018.
“We’ve identified the route and done a lot of testing on the rock because it’ll go through the Hills,” he said. “It’s a complex build.”
The 40km route will connect to Murray Bridge with households expected to be able to plug in from late 2021.
The cut to gas prices comes as utility costs in South Australia begin to trend down.
SA Water has cut prices considerably – saving households an average $200 a year – under instruction from the Essential Services Commission of SA because of improved efficiency and Treasurer Rob Lucas devaluing the assets.
Electricity retailers have also cut prices from this month including SA’s two biggest suppliers AGL and Origin.
The gas price proposal will now undergo a consultation and assessment process before a final decision is made next year.
Energy and Mining Minister Dan van Holst Pellekaan welcomed the proposed cut.
“This builds upon our co-investment in hydrogen at Tonsley to reduce emissions and increase supply of affordable and cleaner gas to households,” he said.
On Thursday, AGN unveiled the southern hemisphere’s largest electrolyser – a $3.25 million piece of equipment central to its plan to blend hydrogen into the gas network from its Tonsley Innovation district plant.