Gas pipeline system under pressure as more Australian chose electric

ABC NEWS (Australia)

For decades the regulation of Australia’s gas pipelines has been based on a growing number of users splitting the costs. But that system is coming under pressure as more Australians leave the network in favour of going completely electric.

Transcript

00:00For more than half a century, the sight of a gas stove igniting has been synonymous with

00:07dinner time. But that's changing.

00:09So we're starting to see with households that there is increasing electrification

00:13and some jurisdictions like Victoria or the ACT have even got policies that would ban

00:19new connections to the gas network.

00:21Gas pipeline owners recover their costs by spreading them across all customers. That

00:26customer base is forecast to plunge in the years ahead, posing a problem for the energy

00:31watchdog, which regulates the prices gas pipeline owners can charge.

00:34When we find ourselves with a customer base that might be changing or shifting or shrinking

00:39through time, we find that we've got less tools available.

00:43One of the tools available to regulators is an accounting trick called accelerated depreciation,

00:48where companies write down the value of the assets faster and consumers pick up the tab.

00:53The thing is, some energy companies are worried about the pace at which it's happening.

00:58We think the transition is behind schedule and that provides the opportunity to slow down

01:05the accelerated depreciation and take some pressure off the consumer bill.

01:10We are talking about the recovery of the money that has been put in to these infrastructure

01:16assets. And that is a separate question from the rates of return which you achieve when

01:20you invest in the assets.

01:22So how's that chart looking then?

01:24The energy regulator insists it must balance the need to maintain that critical infrastructure

01:28with the needs of consumers.

01:30When you look at totally what network businesses have asked of us over the last five years,

01:35it's more than $800 million that they've sought to have accelerated. And what we've approved

01:40is really only about half of that.

01:44New customers don't pay the full cost of a connection because it's subsidised by existing users.

01:49But with more Australians getting off gas, that could change.

01:52You know,the space technology and traffic.

01:54You know.

01:55You know.

01:59Electricity

02:02Eendreet

02:03Doesn't matter.

02:04The hope.

02:04Economic

02:08Eendre.

02:09I don't know.

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