Jemena access arrangement 2020

PIAC provided input to Jemena Gas Networks’ Draft 2020 Plan for its 2020-25 access arrangement period.

We commend Jemena for their broad, comprehensive, responsive and well-timed engagement with consumers and consumer advocates. We have engaged with Jemena on various issues relating to the 2020-25 access arrangements and this submission builds on those interactions. We also commend Jemena for its early adoption of the Energy Charter and for developing its 2020 Plan with the Charter in mind. As a result of this early engagement, many issues have already been resolved. However, we still maintain concerns regarding a handful of issues.

PIAC disagrees with claims that gas is a ‘fuel of choice’ subject to competitive pressures from electricity. As such we do not consider that expenditure on the marketing of gas or the provision of appliance rebates is in the long-term interests of individual consumers. Related to this, PIAC considers the current regulatory framework, in which investment costs are borne by consumers, is inappropriate and recommends risk should be shared between consumers and business based on an assessment of which party has the ability and incentive to manage it.

We reiterate our position from our submission to the Draft Plan, that Jemena’s proposal to use accelerated depreciation for new network investments represents a transfer between consumers in the shorter term and Jemena’s shareholders in the longer term.

PIAC supports Jemena’s intent in proposing to minimise its capital expenditure through the use of volume boundary metering for new high-rise sites with centralised hot-water systems but is concerned about the impact this will have on affected customers, who will be forced into embedded networks as a result.