Gas prices set to rise

GAS prices will likely rise between $152 and $225 per annum from July.

IPART (Independent Pricing and Regulatory Tribunal) has released draft approval for a 17.6 per cent increase in the average household gas bill, the third such increase in as many years.

Gas company AGL, which supplies the majority of customers in NSW, applied for a 27.6 per cent increase which was not approved by IPART.

AGL said IPART had agreed with its proposal to increase the price of gas for households and small business owners.

“Retail gas prices (will rise) ... by an average of 16.9 percent from July 1, including the carbon price,” a spokeswoman said.

“If the carbon price is removed from July 1, the increase will be 11.3 per cent instead.

“If the carbon price is removed this means a typical residential customer using 23 GJ of gas a year will face an average bill increase of about $2 per week including GST.”

The regulator’s chairman Dr Peter Boxall said the rises were significant and were due largely to rising wholesale gas prices and network charges.

“The ability to export liquid natural gas is driving a structural change in eastern Australia’s wholesale gas market and increasingly domestic gas prices will be influenced by what is happening in world gas markets,” he said.

Dr Boxall’s comments were immediately seized on by coal seam gas opponents Lock The Gate, who said they reinforced the argument that it was gas companies that were responsible for rising prices, not a shortage of supply.

“AGL is trying to force CSG (coal seam gas) on Gloucester, threatening their water resources, while at the same time ramping up domestic gas prices,” Lock The Gate’s national coordinator Phil Laird said.

“It’s no wonder communities are up in arms about this industry and the lobbyists who have aided and abetted CSG, much to the detriment of our national interest.

“This report today exposes the bogus CSG industry scare campaign on gas prices: it is the CSG industry, through its export plans, that is causing gas prices to rise and no amount of CSG drilling in NSW can bring those prices back down now that we are captured by the world trade.”

But AGL defended its gas extraction operations and said it believed the commencement of the Gloucester Gas Project would help reduce the cost of gas.

“NSW only produces five per cent of its own gas and AGL believes that securing more gas within NSW will help apply downward pressure on gas prices,” a spokeswoman said.

“The gas from AGL’s project in Gloucester will remain in NSW and will not be exported.

“Water management is crucial to us, as it is to the local community.

“In all aspects of our coal seam gas operations, AGL uses best practice and the highest quality equipment to monitor water, soil and air to protect the environment we work in.”

For the first time, IPART is not setting regulated electricity prices following the NSW government’s decision to fully deregulate the electricity market.

The current regulated prices will apply until June 30, at which time customers who have not switched to a competitive market deal will automatically be transferred to a ‘transitional tariff’.

“Most NSW gas consumers are already on market contracts rather than regulated prices, and we anticipate further competition among retailers as a result of electricity price deregulation,” Dr Boxall said.

“This should lead to more competitive energy pricing and better service standards for customers.”

IPART’s draft decision represents an increase of 16.9 per cent in the 2014-15 financial year and a 0.7 increase in 2015-16. 

The 2014-15 increase would add an extra $152 to an average household’s annual bill and $709 to an average small business customer’s annual bill.

Gas supplier AGL wanted to raise gas prices by more than 25 per cent.

Gas supplier AGL wanted to raise gas prices by more than 25 per cent.


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