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Gas

Gas bills to fall in NSW

Gas network charges are dropping but what about wholesale gas prices 171 6014202 0 14102168 300

The energy sector has been awash with change over the first half of 2015. Gas and electricity prices have come under scrutiny after consecutive months of increases, resulting in skyrocketing utility bills for consumers and gathering discontentment with how the industry is being operated.

However, the Australian Energy Regulator (AER) may have settled on a breakthrough for gas customers in New South Wales, with a recent decision set to cut down considerably on yearly bills. 

As a results of its price determination scheme, the AER has found that one of NSW's major gas distributors must reduce its network charges from July 1 2015. Jemena Gas Networks (JGN) is responsible for the pipelines that supply gas to homes and businesses throughout the state, but the AER has decided that the costs for maintaining and distributing this service are too high. These charges already account for around 50 per cent of an annual residential and small business gas bill, according to the AER. 

Wholesale gas prices are increasing, which could push up household bills.Wholesale gas prices are increasing, which could push up household bills.

AER Chair Paula Conboy said this would result in lower gas bills for customers on JGN's network, but it is difficult to say whether this will remain the case.

The regulator is already competing with the rising wholesale prices of gas, which are causing customer bills to increase across the board.  

"Our final decision will place downward pressure on bills during the 2015–20 period as distribution charges decrease," Paula Conboy said in a June 3 statement. 

"However, the wholesale gas price is forecast to increase over the next few years which makes price predictions difficult."

According to the Grattan Institute, gas prices have risen 36 per cent over the five years to October 2014 - and are set to appreciate further.

Already, energy analyst Energy Quest has found that wholesale gas prices were up 6.9 in 2014, which trickles on to the consumer market. However, there could be some relief in sight. 

The Australian Energy Market Operator's 2015 Gas Statement of Opportunities has revealed that there are no short-term gas supply gaps expected. Predicted declines in consumption and improving infrastructure are driving factors behind this good news, which could take some of the pressure off rising prices.

Good news for households and small businesses

The NSW state government has applauded the AER's determination, highlighting that the 34 per cent reduction in network charges will create $137 in immediate savings for households. 

Minister for Industry, Resources and Energy Anthony Roberts said small business customers will also benefit from the decision.

"With around 15,000 small business customers in NSW, these reductions could mean up to $1,657 off an average annual gas bill," he said. 

"Customers are in the driving seat to take advantage of these savings and I encourage people to shop around, find the best deal for you and save money."

While finding a deal for your home and business on your own can be complicated and time consuming, the team of experts at Make It Cheaper can take the hassle out of the comparison. They will do the scouting on your behalf, determining which gas supplier offers the most competitive deal for your circumstances and will even take care of the switching process for you. 

Posted by Richard West

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