AER allows revenue to support gas consumers in transition to renewables

The Australian Energy Regulator’s (AER) final decision on the 2021–26 access arrangement for Evoenergy released today will support provision of gas network services to 150,000 households and small businesses, while enabling their transition to renewable energy.

AER Chair Clare Savage said Evoenergy will expect to collect $317.4 million in revenue from consumers in the Australian Capital Territory (ACT) and New South Wales (NSW) over the next five years to provide network services.

“As consumers make the switch to renewable energy under the ACT Government’s climate change strategy it’s expected there will be less demand for gas in the ACT,” Ms Savage said.

“This means any remaining consumers who can’t or don’t yet choose renewable energy services are at risk of future bill increases because less homes and businesses can share the cost of maintaining gas network services.

“To minimise future price increases, particularly for vulnerable consumers that might not be able to afford to switch, the AER’s decision allows Evoenergy to accelerate the depreciation of new gas pipeline assets in NSW and the ACT.

“Faster depreciation means that some of the costs for gas network services can be recovered from more consumers today, compared to a smaller number of consumers in the future.

“Evoenergy has engaged well with consumers in this review, reflecting many of their views and priorities in its 2021–26 proposal, with future potential for deeper engagement with consumers on energy transition issues.”

Evoenergy has proposed a significant decline in ACT residential gas demand over the next five years and the AER’s final decision approves a more modest decline in demand.

Evoenergy’s expected revenue of $317.4 million for the next five-year period has been reduced by around $1.3 million (0.4 per cent) compared to the current five‑year period.

Gas bills are made up of network costs, wholesale costs and retail costs.

Evoenergy’s 2021–26 access arrangement will deliver a reduction in network costs for its consumers in the first year with annual household gas bills estimated to decrease by $10 for households and $90 for small businesses. They will then increase on average by around $14 for households, and $127 for small businesses, each year over the remaining four years as demand is expected to decline.

Evoenergy provides gas to 150,000 consumers in its network, 90 per cent in ACT and 10 per cent NSW. The access arrangement decision recognised the advancements of energy policy in the ACT could have a price impact on NSW consumers due to the increase in costs to run the network as ACT gas demand declines.

Find out more by visiting Evoenergy - Access arrangement 2021–26.

Issued date: 
30 April 2021
AER reference: 
NR 12/21
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