10 January 2017

Prices set to drop under new gas network proposal

Gas network charges for many Victorian customers will fall by 5 per cent from 1 January 2018 under a proposal by Victoria’s largest energy delivery business, AusNet.

The plan also incorporates significant investment in safety and reliability for AusNet’ gas distribution network, which serves around 665,000 customers across central and western Victoria.

The proposed price reduction is part of AusNet’ five year plan submitted to the Australian Energy Regulator’s Gas Access Arrangement Review 2018-22. The review determines the revenue and customer costs for gas distribution businesses.
AusNet’ Executive General Manager – Regulated Energy Services, Alistair Parker, said the proposed plan focused on strengthening the network so it could continue delivering safe, reliable and affordable gas to Victorians.

“We understand our customers are concerned about rising energy prices,” Mr Parker said.

“Our proposal allows us to meet the needs of customers while continuing to offer one of the lowest gas network charges in Australia.

“If these price reductions are passed through to consumers, it will cost less for heating, cooking and hot water across our service area.”

Under the five-year proposed plan, AusNet will:

  • Continue improving the safety of the 11,000 kilometre pipeline network by removing and replacing old and deteriorating assets. All low pressure mains are expected to be replaced by 2025;

    • Connect more than 83,000 new customers, with growth forecast at 2 per cent a year from 2018 to 2022;

      • Encourage greater use of gas in regional areas and promote the cost and amenity benefits of gas consumption; and

  • Improve customer and stakeholder engagement to ensure we are delivering what the community needs and expects.

“The significant changes happening within the natural gas market in Australia have implications for how we operate and invest in our gas business,” Mr Parker said.

“It’s important we better understand the needs and wants of our customers regarding the service we provide.”
AusNet consulted with more than 700 customer and stakeholders during the development of the gas plan.

In 2018, our proposed network prices will reduce by 5 per cent in real terms. Following this decrease, AusNet’ prices are proposed to increase at 2 per cent plus inflation a year. Gas distribution charges represent about 30 per cent of a residential customer’s total gas bill.

The Australian Energy Regulator will now review the proposal before making a determination.
AusNet’ submission to the Gas Access Arrangement Review 2018-22.

The proposal can be viewed by visiting our Determining Revenues page.