Australian Gas Networks (AGN) has developed a South Australian Draft Plan for the five year period commencing 1 July 2021, which will see bill reductions for more than 455,000 households and small businesses connected to natural gas.
The Draft Plan proposes an eight per cent reduction to gas distribution charges in real terms from 1 July 2021. This follows on from a 23 per cent real reduction delivered at the beginning of the current period which commenced on 1 July 2016. Gas network charges make up about a half of the average residential bill in South Australia.
AGN estimates the average flow-on effect to its 444,000 residential and 11,000 small business customers in South Australia will culminate in their gas bills dropping by about $30 to $270 per annum respectively, assuming other components of the bill do not change.
The Draft Plan was developed following an extensive period of consultation with customers and stakeholders.
AGN Chief Executive Officer, Ben Wilson, said, “Our proposed reduction in gas network charges will take some of the pressure off household and small business gas bills.
“During our 12-month engagement process, our customers have told us that price and affordability is the top priority. The proposed price cut will improve the affordability of natural gas for our new and existing customers in South Australia,” Mr Wilson said.
“The Draft Plan outlines our ongoing mains replacement program, which whilst underpinning our commitment to reliability will also achieve a key safety milestone, seeing the remaining 550km of low pressure cast iron pipes replaced by 2025/26.”
The Draft Plan also sets out the potential role of gas distribution networks in a low-carbon energy future in South Australia, and explores the steps AGN is taking to transition the network to renewable gases such as hydrogen and biomethane.
AGN will formally lodge its plans with the AER by 1 July 2020 in the form of a revised Access Arrangement for the 1 July 2021 to 30 June 2026 period.
“The Draft Plan provides an opportunity for our customers and stakeholders to understand and comment further on our approach before we submit our Final Plan to the Australian Energy Regulator (AER),” Mr Wilson said.
AGN is inviting submissions on the Draft Plan by 17 April 2020. The Draft Plan is available at Gas Matters