Gas network pricing announcement provides clarity, call to action for just energy transition

The ACT Council of Social Service (ACTCOSS) has welcomed the clarity and certainty provided by today’s decision by the Australian Energy Regulator (AER) on the 2021-26 ACT gas network access arrangements.

Dr Emma Campbell, ACTCOSS CEO said: “Network costs make up about a quarter of a household gas bill. Today’s decision by the AER will see an initial decrease in network costs for ACT consumers, followed by a yearly increase over the next four years. In practical terms the average household will see a $10 decrease in annual network costs in 2021-22, followed by a $14 annual increase in network costs from 2022 onward.

“ACT residential and small business gas consumers have faced significant uncertainty around Canberra’s energy transition and the future of gas, and today’s decision provides them with a timeframe and an indication of future costs.

“This decision reflects the long-term ACT Government plan to phase out fossil fuel gas in the ACT, and consequent forecast reduction in ACT gas customers and gas consumption over the next five years.

“For homeowners with disposable income, an indication of future energy costs can allow them to perform a cost-benefit analysis of the desirability of maintaining or replacing gas appliances,” Dr Campbell said.

However, Dr Campbell highlighted the importance of ensuring that the transition away from fossil fuel gas did not lead to higher costs or inequity for people on low incomes or other vulnerable individuals.

“For renters and people on low incomes, upgrading their appliances may not be an option. These Canberrans are already spending a greater portion of their income on energy bills than the average household and are most likely to be impacted by cost increases.

“It is important that we do not end up with vulnerable people stranded on the gas network, paying an increasing premium for basic human needs such as hot water, meals, or to heat their houses. This is a real danger unless we have a comprehensive energy transition strategy.

“ACTCOSS welcomes commitments by ACT Government to develop such a plan by 2024 and by Evoenergy to develop a transition roadmap during the 2021-26 period. For low-income households seeing a price increase in 2022, however, this is not soon enough.

“We need a plan now, not in three years, to ensure low-income and other vulnerable households are not left behind in the transition to net zero greenhouse gas emissions. This plan must identify and address barriers that they face and offer real solutions.

“As we better understand the impact of the transition to net-zero emissions, we need to ensure that our utilities concession scheme is fit for purpose and is accessible by all those in need. Not every low-income household currently holds the concession-card necessary to access the scheme,” Dr Campbell concluded.

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