Lower gas charges good news for the environment: Bradley

The decision to lower network charges to gas customers in South Australia and the Australian Capital Territory is “good news for customers and it is good news for the environment” according to The Energy Networks Association (ENA) CEO John Bradley.

Gas networks in South Australia and the Australian Capital Territory will deliver falling network charges to gas customers in draft decisions by the Australian Energy Regulator for Australian Gas Networks (AER) and ActewAGL.

The proposed action is to lower average network charges below inflation over the next five years.

Mr Bradley said “Australia’s network of natural gas infrastructure complements the electricity network and also assists in mitigating peak electricity demand, the primary driver of long-term electricity network costs.

“For households that have adopted solar energy to reduce their emissions, natural gas also plays an important role when the sun is not shining in achieving ongoing reductions in carbon emissions,” Mr Bradley said.

However, the decision was marred by the rejection of incentives based on frameworks used by electricity network businesses. Mr Bradley said “Australian Gas Networks proposed incentives, which would share the benefits of innovation, are based on modern approaches introduced for electricity network businesses in both Australia and the United Kingdom.

“These incentive frameworks keep the focus on the customer and we welcome the AER indicating it is open to considering such reforms in an industry-wide approach.

“The bad news for South Australian gas customers is this means the benefits of these new incentive schemes will be delayed unnecessarily,” Mr Bradley said.

ENA is examining elements of the decision, including the rejection of significant elements of proposed mains replacement, which were put forward by Australian Gas Networks as necessary to maintain the ‘backbone’ of the gas network.

However, ENA notes that the decision calls for further information from the business before this expenditure is approved.

Enter your details to subscribe to the free fortnightly Gas Today e-newsletter

Thank you for signing up for the Gas Today Online Update.