No easy answers to gas network ‘death spiral’
Australians embrace electricity on behalf of carbonalization, healthier houses and cheaper invoices, but shift has policy makers to insulate a gas user pool that shrinks from price shock.
Ron Ben-David, a former regulator who received a professional scholarship in Monash Business School, describes the flight from the gas network as “death spiral ..
Like a illegal train, when some households begin to leave the gas network, it increases for those who remain running and sustaining and asks them to switch further.
And so on.
Although it is a gain for electrification and cutting emissions, the spiral of death has the results for at least tenants and others who can fight to get rid of the gas.
Even middle -income household peoples may have difficulty to collect the heavy amounts required to change gas heaters, ovens and stoves as gas bills continue to rise.
Dr Ben-David, who was left uncontrolled, said the problem could weaken community support for net zero transition.
“If we lose consumer support, we can kiss the transition,” AAP said.
The problem of stricular gas presence, governments, regulators and all the industry were not noticed seeking solutions.
Consumer and prosperity groups have also been active, energy consumers forced Australia to change the full cost of new connections to pay the full cost of new connections to stop the growth of the problem Australia, Australia.
Dr. Ben-David believes that there is no easy solution to the political decision.
Discussion, consumers, investors and taxpayers all in the game “pay for what”.
The issue is complex due to the unusual nature of the gas distribution regulation.
As natural monopolies, gas network companies are not allowed to determine their prices.
Prices should be approved by the Australian energy regulator under what is defined as a “regulatory compact özen that enables investor funds to be returned to their life throughout the life of assets.
Therefore, it is claimed that forcing investors to copy the risk of risks is a broken compact, Dr. Ben-David made the network series more complicated than just writing a DUD investment.
The “accelerated depreciation” is the answer for gas network companies. This means asking the regulator to explain the abbreviated life of their assets so that they can increase customer prices in the nearby term to accelerate the recovery of their investments.
Governments can also help absorb some of the shrinking customer base costs, but the state and federal budgets are already forced and it may be politically controversial to save gas networks.
Dr Ben-David revealed another option.
Under the recommended model, electricity distribution networks will handle the narrowing gas network.
There is more in his thought, but using the income produced by electricity distribution companies – and customers, and to undergo decreasing gas networks.
It is based on the grounds that electrical networks will continue to expand and that they have a long life in a low -carbon economy.
He acknowledges that adding to electrical prices to pay gas networks is controversial, while other options are not equally attractive.
He also called for better ideas and quickly.
“The best time to solve a problem, before the problem comes out,” he said.
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