Households using gas set to be hit with extra charges

Households using gas are set to be hit with extra charges worth up to $138 over three years, with an energy giant blaming hikes on government energy policies.

Households using gas are set to be hit with extra charges worth up to $138 over three years, with an energy giant blaming hikes on government energy policies.

And more pain lies ahead, with pipeline operators signalling the need to speed up their cost recovery systems – paid over time through bills – because of declining customer numbers.

Distribution giant AusNet, which has 680,000 customers across Victoria, is the first to apply to the Australian Energy Regulator to hike network access fees, arguing that costs the regulator had approved last year were already outdated due to government policy changes.

Its submission to the AER says the Victorian government’s electrification push, which includes a ban on new home gas connections, means its network “must inevitably cease growing and start declining in size”.

Households using gas are set to be hit with extra charges.

AusNet argues that the rate at which customers pay back their historic investment in the network should increase by $70 million over the next three years, or $46 a year on average for residential customers, to spread the pain more equitably in the near term.

“Early actions such as faster capital recovery is the best way to protect customers and enable us to continue managing the network safely and reliably for as long as it is needed by Victorians,” it says.

“Stabilising the long-term price, recovering sunk costs and managing the impacts of a network that is declining are best addressed while the customers for which the sunk investment was made remain on the network.”

National director of energy policy and Research at St Vincent de Paul Society, Gavin Dufty, said the shift presented “a huge intergenerational equity issue”.

“Those who can move quickly and get off gas under the current arrangements avoid paying their fair share of the gas network going forward,” he said.

“Governments need to look at concession rates and discounts for those who can’t pay for electrification or to move.”

Gas users face more bill pain in the future.

The AusNet submission to the AER, which also mentions federal government policies to encourage electrification, acknowledges it is “markedly unfair to knowingly place most of the recovery on the future customer base, most likely to be those that are least able to transition through no fault of their own”.

Opposition energy spokesman, David Davis, said “Labor’s disastrous war on gas will see Victorian households and businesses pay more despite the cost-of-living crisis”.

“This will load further costs onto family budgets to pay for Labor’s plan to ban gas even though overwhelmingly Victorians want to keep gas,” he said.

Billions of dollars has been invested in the gas network in Victoria over decades, with companies recovering those costs over time through access charges.

This is currently about $300 for AusNet residential customers, or 15 per cent of an average annual bill worth $2100.

A spokesman for the Allan government said: “We expect the Australian Energy Regulator to put Victorian families and businesses at the centre of their decision-making”.

“We will work with the regulator to ensure the gas network can continue to meet the needs of future gas users,” he said.

Originally published as Households using gas set to be hit with extra charges