NSW gas network charges to fall

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The Australian Energy Regulator (AER) has confirmed that from July 1, the amount charged for the distribution of gas to homes and businesses via the Jemena Gas Network in NSW will fall.

It comes after the AER released its Final Decision on its pricing proposal for the 2020-2025 period.

The gas distribution charge is typically 35 per cent to 40 per cent of a residential gas bill.

A typical NSW residential customer is set to save $254 (19 per cent) over the next five years, and those living in regional areas, who typically consume more natural gas, will save around $369 over the next five years.

The savings for small and medium commercial customers will be approximately $1,585 and $15,516 respectively over the next five years.

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In addition to cost savings, the 2020-2025 period will also deliver customer benefits through improvements to the Jemena Gas Network (JGN), which transports natural gas to 1.4 million NSW customers. These benefits include:

  • Maintaining the safety and reliability of the network
  • Connecting more than 145,000 homes and businesses across NSW to the network
  • Streamlining customer experience
  • Renewing 146 kilometres of mains to improve network efficiencies.

Jemena’s executive general manager of gas distribution, Dr Jennifer Purdie, said today’s successful outcome is the result of an extensive community engagement process.

“Jemena presented its proposal for the 2020-2025 period after an extensive customer engagement program across New South Wales. This included multiple meetings across suburban Sydney and regional NSW. We gave customers an opportunity to say what they wanted and they were clear in their expectations of wanting access to natural gas for cooking, heating and hot water at a fair price, and that is what we have delivered,” she said.

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“We thank our customers for their honest feedback in helping to shape the new price structure and we acknowledge the work of the Australian Energy Regulator.”

The announcement comes at a time when the business community is calling for lower gas prices on the east coast as our economy responds to the impacts of COVID-19. It also comes when individuals and families in New South Wales are using more gas working from home and as winter sets in. In this context, and together with lower wholesale prices, the AER’s Final Decision is an opportunity for retailers to pass these reductions on in full to customers.

In handing down the Final Decision, AER Chair Clare Savage recognised Jemena’s ‘high quality’ approach to customer engagement.

“JGN’s meaningful engagement on its proposal, founded on multiple consumer forums held in coastal and regional NSW, meant that we knew JGN was ‘walking the walk’ and not just ‘talking the talk’ with its consumers,” Ms Savage said.

“Energy affordability came out as a key priority for JGN’s gas consumers. To its credit, JGN has in turn responded to those concerns by putting forward a proposal that puts downward pressure on gas network charges and consumers’ bills in the 2020–25 period.”

Today’s statement is the second significant pricing announcement made by Jemena in recent months in support of NSW gas customers. In early April, Jemena, along with other energy distributors announced it was participating in the Energy Network Relief package, and would waive or defer its gas distribution charges for customers experiencing hardship, as a result of the coronavirus pandemic.