Consumers are paying hundreds of millions of dollars extra a year to compensate gas pipeline companies for the risks associated with the vast network of large and small pipelines that transport gas to your home. Gas pipeline owners are being allowed to fast-track the process for writing down the value of their networks as the electrification trend gathers pace.
Category
📺
TVTranscript
00:00At home in early autumn, Sonia Hicks doesn't have much need for gas.
00:08The retired physiotherapist lives in Pinjarra, south of Perth, and her gas bills at this
00:13time of the year are low.
00:14The last bill was $2 for the use of gas, which is basically just for heating saucepans of
00:22food is about $2 and the rest is $40, which is made up for their administrative costs.
00:32While Sonia Hicks' gas bills are low in March and April, it's a different story come wintertime
00:37when she and her husband rely heavily on a gas heater for warmth.
00:41Costs can be anywhere up to $700 a year.
00:44Being retired we do need it on during the day as well, so that probably doesn't help.
00:49We try and avoid putting it on until the evening, but sometimes it's just too cold.
00:55Those costs are set to increase further, courtesy of little-known changes washing their way through
00:59Australia's gas systems.
01:01Faced with declining use of their assets as more people switch to electricity, gas pipeline
01:06owners are fast-tracking the process of writing down the value of their networks.
01:10But instead of wearing the costs themselves, they're getting consumers to pick up the tab.
01:15What they're saying right now is households have to pay all the costs today, and we don't
01:19think that's fair.
01:20Under Australia's energy laws, gas pipeline owners can effectively pass on any costs deemed
01:25efficient by the regulators.
01:26In this case, critics say it's bringing forward billions in costs, and will add between $100
01:32and $200 to consumers' bills over the coming few years.
01:35And they warn the risks will grow larger as more people get off gas, and those left behind
01:40have to pick up ever-increasing costs.
01:43When you dig into it, it's actually the heart of the transition.
01:47If we don't get on top of this problem now, it becomes a much more difficult problem to
01:51solve into the future.
01:52Critics say Australia's gas network rules are unreasonable, and lead to consumers
01:57shouldering virtually all of the risks.
01:59But the companies that own the gas pipelines say the system is fair, and their returns are
02:05modest.
02:06When you invest in regulated utilities, there are trade-offs for investors and consumers,
02:12but we're dealing with an environment where the returns that investors receive is dictated
02:20by government.
02:21For Pinjarra retiree Sonia Hicks, the changes might just accelerate her transition away from
02:26the fuel.
02:27There is a finite point where you've got to say, hey, you know, you might have issues,
02:31but I can't afford your type of heating anymore.
02:35There is a lot of rain that is facing cold comfort ahead of winter.