AER issues final decision for AGN’s South Australian gas distribution network

The Australian Energy Regulator has issued its final decision on the access arrangement that will apply to Australian Gas Networks’ South Australian distribution network from 1 July 2016.

“The AER’s role is to ensure that consumers pay no more than necessary for the safe and reliable delivery of gas by setting the overall revenue these businesses can recover from customers,” AER Board Member Jim Cox said.

A significant component of the allowed revenue is the estimated cost of financing investment to maintain a safe and reliable supply of gas. Reflecting the improved financial market conditions since our last decision in 2011, the expected cost of capital has fallen leading to lower prices to customers.

The revenue the AER has approved accounts for approximately 56 per cent of an average South Australian gas bill each year. If other components of the bill stayed the same, and the lower distribution charges flowing from this final decision are passed on to customers:

  • The average annual gas bill for a residential customer in South Australia would be expected to decrease by approximately $144 in 2016-17. For the next four years, annual bills would rise on average by 3.4 per cent per year.
  • The average annual gas bill for a small business customer in South Australia would be expected to decrease by $750 in 2016-17. For the next four years, annual bills would rise on average by 3.2 per cent per year.
AER Final decision on revenue for 2016–21
AGN’s proposed revenue for 2016–21 AER Final decision on revenue for  2016–21 Percentage difference Estimated reduction to average annual gas bill in 2016–17: residential Estimated reduction to average annual gas bill in 2016–17: Small business
$1228.4 million $985.5 million -19.8% $144 $750

“The AER expects that retailers will pass through these savings. But we also urge consumers to shop around and take advantage of competitive retail market offers to ensure they get the benefits of today’s decisions,” Mr Cox said.

South Australian customers can compare retail offers on the AER's Energy Made Easy website.

Sector: 
Segment: 
Issued date: 
26 May 2016
AER reference: 
NR 011/16
Contact: 
AER Media inquiries 1300 138 917