$2b energy deal between federal and state governments to lop $40 off electricity bills, halve gas costs

The savings forecast under the $2 billion energy deal between Scott Morrison and Gladys Berejiklian can be revealed for the first time.

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EXCLUSIVE

Household electricity bills will fall by an average of $40 a year due to the energy deal struck between the NSW and federal governments, while gas prices for businesses could halve. Under the plan the rate of emissions reduction should also double.

State government modelling shows the pact between the Coalition administrations underwrites the delivery of household power bill savings of $1.9 billion a year, or $40 per household.

The prospects of the $3 billion Narrabri gas project getting the go-ahead also appear to have improved as a result of the agreement.

Its terms obligate the state government to “facilitate investment opportunities” to inject an additional 70 petajoules of gas per year into the east coast market.

When The Saturday Telegraph asked Premier Gladys Berejiklian how she planned to deliver on that, she replied: “Obviously the government’s in the final stages of considering the Narrabri gas proposal. That will meet these targets.”

NSW Premier Gladys Berejiklian and Prime Minister Scott Morrison announce the energy deal on Friday, January 31, 2020. Picture: AAP’s Bianca De Marchi

It is understood project developer Santos has privately vowed the 95,000ha coal-seem proposal would halve the price of gas in NSW.

Businesses, in particular, are in need of substantial relief from sky-high prices.

Industry sources said a large commercial baker in Sydney pays $25,000 more for their gas than a similar operation in Brisbane.

Sonia Jabbour’s family runs two Sydney bakeries called Oregano, in Peakhurst and South Hurstville, and has seen her energy bills “go through the roof”.

Ms Jabbour supports the decision to increase supply to cut prices. “It would be amazing, we definitely welcome it,” she said.

Sonia Jabbour and family operate Oregano Bakery across two stores in Sydney's south. Picture: David Swift.

The Narrabri project’s future will be decided by an independent commission before July.

Ms Berejiklian said NSW had other options open to find the 70 petajoules of gas, via two new import terminals.

These have the potential to bring in as much as 210PJ.

The funds that flow to NSW under the new deal allow it to deliver its plan for net zero emissions by 2050.

The interim goal is a 35 per cent cut in carbon by 2030.

Business as usual would only spur a 18 per cent drop.

The agreement will see the federal government commit $960 million to emissions reductions projects in NSW, with the state obliged to spend a further $1.01 billion.

Prime Minister Scott Morrison said “this is about working together to drive down prices, working together to reduce emissions, working together to get the gas. “This puts downward pressure on prices, supports manufacturing jobs and backs up our record investment in renewables as we undergo a responsible energy transition.”