Anger over rising fees to pay for future stranded gas infrastructure is building, with another consumer advocate demanding regulators better manage the new cost on customers.
The Justice and Equity Centre (JEC) says in a new submission that it’s not fair to charge today’s gas users for tomorrow’s problems when gas network owners can’t even identify what the exact cost to future consumers might be.
It’s arguing that “accelerated depreciation” – dropping the value of assets faster so customers can be charged more, earlier – is being used to pay for more than just stranded asset risk, and gas networks need to give a full accounting to justify risk-based hikes.
“Accelerated depreciation has inappropriately been presented as a tool to manage intergenerational equity, often to the exclusion of any other consideration,” says the JEC’s rule change request to the Australian Energy Market Commission (AEMC).
“We contend it is inherently inequitable for today’s consumers to bear investors’ potential future costs, particularly when there is no certainty as to what specific asset risks these costs relate to.
“If the fair cost to future consumers is not established, then it is not reasonable for existing consumers to assume an increased cost.”
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