Energy experts at the Justice and Equity Centre (JEC) say gas consumers in NSW face unfair extra costs following yesterday’s determination by the Australian Energy Regulator (AER).
The regulator’s Final Decision on Jemena Gas Networks (NSW) allows Jemena to recoup $1,200 in costs when a household disconnects from gas but only charge the disconnecting customer $250, bringing the charge for permanent disconnection in line with the charge for temporary disconnection. The $950 shortfall will be added to gas bills for people who remain on the network.
This decision is estimated to cost NSW gas customers $12.7 million over 5 years. But permanent disconnections are projected to increase, so this cost will rapidly grow unless there is intervention by the NSW Government or energy market commission.
The AER says: ‘Reducing the price gap between temporary and permanent disconnection services is aimed at addressing safety concerns consistent with the view of the NSW safety regulator.’ However, this decision makes remaining customers pay extra to avoid a potential safety issue caused by others.
The JEC argued for tighter regulation of disconnection costs based on safety, while ensuring those remaining on the network are not responsible for costs they can’t control.
The JEC has also lodged a proposal with the Australian Energy Market Commission to regulate what gas businesses can charge for disconnections, supporting safety and fairness.
Quotes attributable to Douglas McCloskey, JEC Energy and Water Justice Program Director:
‘We understand why the regulator has made this decision. Households want to get off gas to use cleaner, cheaper electricity and shouldn’t face inflated disconnection fees. But forcing people who are still connected to subsidise that cost isn’t sustainable or fair.
‘The regulator has acknowledged its solution isn’t sustainable. In fact, it makes the problem worse: the more people disconnect, the higher the costs being slapped on a smaller number of people who remain.
‘The bill impact may seem small now, but it will compound over time.
‘Hundreds of thousands of households in NSW are stuck with gas connections because they’re renters or can’t afford the upfront costs to switch to more efficient electric appliances. They are already paying more and this decision hits them with additional unfair costs.
‘Government can support better and fairer solutions, including by offering programs to help people to get off gas and subsidising the cost of disconnections.’
Media contact: Media and Communications Manager Dan Buhagiar, 0478 739 280
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