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Gas Prices Set to Fall

1 July 2020

Distribution charges for natural gas are set to be slashed from the start of the new financial year, after energy company Jemena’s pricing and services plan was endorsed by the Australian Energy Regulator in June.

As a result, distribution charges for a typical residential customer in New South Wales will be reduced by around $254 over the next five years. The reduction is even greater for people living in regional areas, who typically consume more gas, where savings will average around $369 over the next five years.

Jemena’s Managing Director, Frank Tudor, said it is now up to energy retailers to pass these savings on to customers.

“Since 2014-15 gas distribution charges have made up a smaller and smaller portion of a customer’s total gas bill. In 2014-15 distribution charges accounted for around 50 per cent of a customer’s total bill, whereas today that figure is between 35 and 40 per cent,” said Mr Tudor.

Mr Tudor said that in determining the new pricing structure, the company conducted an extensive customer engagement program.

“Jemena met with individuals, families, small business owners and large industrial customers over a two year community engagement program across New South Wales. We were told quite clearly, that customers wanted natural gas for cooking, heating, and hot water at a fair price, and that is what we have delivered.

“Now, as the economy recovers from the COVID-19 Pandemic, and we’ve hit winter, it’s more important than ever for customers to have access to affordable gas.

“At the same time, we’re also investing in renewable gas as we seek to understand how we can transform the NSW gas grid for a low-carbon future. Our Western Sydney Green Gas hydrogen project will demonstrate how solar and wind can be used to generate hydrogen gas which can then be stored in existing infrastructure and enable our customers to access ‘green’ gas,” Mr Tudor said.

Mr Tudor said distribution charges for small business and medium commercial gas customers will reduce by approximately $1,585 and $15,516 respectively over the next five years.

To read the AER’s Final Decision media release, visit here.
To watch the Jemena Gas Network engagement forum video, click here.
To view the Access Arrangement documents, click here.

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