Victorian gas networks driving efficiency and innovation

Victorian gas distributors, Multinet Gas, Australian Gas Networks and AusNet Services, are exploring new incentive arrangements to drive efficient gas network investment.

The Energy Networks Association (ENA) has said there is a clear opportunity to promote the long-term interests of gas customers by improving investment incentives for gas networks.

ENA CEO John Bradley said energy networks support incentive-based mechanisms to promote efficient network expenditure and lower customer costs.

“Victorian gas distributors are consulting on potential changes to incentive mechanisms they could propose to the Australian Energy Regulator (AER) for their forthcoming access arrangements period,” Mr Bradley said.

“The proposals reflect reforms occurring overseas to focus on customer outcomes – in the UK they are driving businesses to be more focussed on their customers than the regulator.

“The Victorian consultation process demonstrates that network businesses are making genuine efforts to effectively engage with customers and increase transparency in developing their access arrangements proposals.”

Gas network incentives must support efficient expenditure through the regulatory period, Mr Bradley said, to ensure optimal levels of investment in network innovation can be delivered, and to balance cost reduction and service delivery outcomes.

“These kind of reforms can encourage a strong focus on providing quality customer service including by better aligning incentives for gas businesses with desirable outcomes for customers,” Mr Bradley said.