The National Gas Rules (NGR) are no longer fit to promote and protect consumer interests and enable to efficient and orderly retreat of gas networks. We proposed a suite of rule changes, aiming to ensure gas businesses are planning for this reality, investing efficiently and managing risks of the decline to protect consumers. This included reforms to ensure costs associated with network decline are shared fairly between consumers, businesses and government.
The AEMC’s draft determination misses the mark, with an approach to network redundancy and accelerated depreciation that inequitably shifts more risks and costs onto consumers. It also does not do enough to push gas networks to do all they can to efficiently and fairly enable the transition. That’s why our response to the AEMC’s Gas Networks in Transition Draft Determination recommends changes for final rules that:
- Implement more robust requirements to make the long-term outlook deliver as intended;
- Ensure the regulator maintains its current level of discretion in access arrangement decisions;
- adopt the price path approach employed by the AER in recent decisions, rather than the ‘switching point’ concept, to determine what additional costs are reasonable to recover from consumers, and;
- include strengthened provisions for redundancy, by providing broader scope for partial redundancy to be triggered in response to any quantified and demonstrated future stranding risk.
What’s next?
The AEMC is scheduled to make its final determination by the end of the year. In the meantime, we’ll continue to work with government, networks and consumer advocates to develop better solutions that protect consumers and make the gas rules fit for purpose.
Read more:
Joint response to the Gas Networks in Transition consultation paper
Submission in response to the Gas Networks in Transition Directions Paper
