Bill hikes loom as shrinking gas pool pays for network
Australians are buying gas stoves and heaters every day, with no hint that their bills will balloon as other customers abandon the network in droves.
Energy Consumers Australia suggests consumers should warn they will be forced to cover gas network costs for decades as electrification accelerates.
“When we buy our cartons of eggs we know how many chickens there are per hectare,” Brian Spak, the consumer group’s general manager of advocacy and policy, told AAP.
“But when you buy a gas appliance, there is no simple consumer information on the package.”
The threat of unsustainable price increases underpins the consumer advocacy group’s calls for a “fair and orderly” shut-down of gas.
A national electrification plan targeting gas-free new homes by 2028 and all-electric homes by 2050 should be accompanied by a national electrification plan targeting mandatory replacement of faulty gas appliances on consumer appliance labels and rentals.
In addition to reducing upgrade costs, it is also proposed to manage the transition of the $11 billion gas network, sharing costs fairly between consumers, networks, investors and taxpayers.
While climate targets and an improving economy are driving the electrification of homes and businesses, household gas bills are expected to rise, leaving a shrinking pool of customers to cover gas pipes and infrastructure costs.
The Australian Energy Market Operator predicts a decline of around 80 per cent in domestic and commercial gas use by 2045.
Modeling shows South Australians could face a nearly 65 per cent increase in their total gas bill over the next decade if they are not electrified.
By mid-century, households in the state could be paying 265 percent more for natural gas.
Renters, low-income households and apartment dwellers will likely experience gas shortages.
Regulators are responding and new gas buyers will soon be paying upfront for connections to stop costs being socialized to the entire customer base.
Mr Spak said coherent government policy at the national level was also needed.
“We need the government to accept this direction, first of all,” he said, adding that the energy market is moving in this direction.
The government has quietly acknowledged that the phase-out of natural gas is planned, but said “saying it out loud” would send a message to choose electricity as gas appliances approach the end of their lifespan.
“The longer we wait, the harder things will get,” he said.
“There will be people who buy gas appliances now or five years from now and then get stuck with this gas appliance they don’t want.”
State and territory governments are primarily responsible for gas networks, with the Australian Capital Territory and Victoria leading the way towards electrification.
Other gas-dependent states, including South Australia, NSW and Western Australia, are lagging behind.
While banning new gas appliances has been flagged as the most effective route to electrification, the report acknowledges that political appetite for restricting consumer choice is limited.
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