Energy News
AEMC Drafts New Rules to Protect Consumers as More Australians Leave Gas
With the ‘electrification’ trend gaining traction, the AEMC is looking to mitigate charges passed on to existing gas customers.
Important Points
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The AEMC has released draft rules to protect gas consumers as more Australians switch to electric appliances.
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The proposal aims to ensure remaining gas customers aren’t left covering the growing costs of maintaining gas networks.
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Gas distribution networks would need to publish clear plans on how they’ll manage falling demand and adapt infrastructure.
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The draft rules address the risk of “stranded assets” – pipelines and systems that may become uneconomical as gas use declines.
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Without reform, fewer gas users could mean higher network costs passed onto households who can’t yet switch to electric.
As more Australian households consider moving away from gas and switching to electric appliances, the Australian Energy Market Commission (AEMC) has put forward draft rule changes protecting gas consumers, especially those who stay connected to the network longer. The draft regulations address how gas networks operate and work to protect consumers so they aren’t unfairly left covering the costs.
What’s Changing? What’s Proposed?
One of the AEMC proposals addresses how gas distribution networks handle customers leaving the system. With fewer people using mains gas, the cost of maintaining pipelines and infrastructure falls on a smaller group of remaining users, which could lead to higher bills. The AEMC is looking to make sure those costs are shared in a fairer manner.
Another key change is the planning requirement. Gas networks would be required to present clearer, publicly available plans showing how they will adapt to declining demand, manage infrastructure, and avoid unnecessary spending in the long run.
1The Decline of Gas in Homes and Why the Rules Are Changing
Gas networks are built on the assumption that many customers will use the service over time. As households move away from gas-based appliances and leave the network, fewer customers can cover the fixed costs of pipelines and infrastructure.
If nothing changes, the Aussies remaining on gas networks might face higher charges. The proposed rules aim to ensure that this doesn’t happen.
According to industry analysis, residential and commercial gas use in Australia is expected to decline significantly this decade, raising concerns over so-called “stranded assets” (infrastructure that outlives its economic usefulness) and the risk that costs could shift unfairly onto consumers.¹
Good Intentions, But Some Gaps
The draft rules are a good fallback option: they anticipate the decline in gas and force networks to be held accountable. However, this is still being drafted and does not yet guarantee immediate relief for consumers.
Also, the technical details are complex, and many households may find it hard to see how the changes will affect their power bill as a whole, which is an entirely different issue with the cost-of-living crisis still out of hand.
Additionally, while the rules look to prevent costs being unfairly loaded onto gas consumers, the actual impact will depend on how gas network operators implement the changes, how quickly electrification advances, and how state governments integrate these policies.
Author
Benjamin TomBenjamin is a utility specialist passionate about creating informative content about the energy, internet, and solar markets. With extensive experience in the telecommunications industry, Benjamin drives our unique blog posts, articles, and reviews. He is focused on breaking down the technical jargon so our readers can better understand the telco market and industry. Whether he is comparing the latest internet deals or creating unique guides, Benjamin takes great pride in creating helpful, easy-to-read content.
Sources:
¹Australian Pipelines and Gas Association. (2024). Gas networks in transition: Submission to the Australian Energy Market Commission (AEMC). Retrieved from https://apga.org.au/submissions/aemc-gas-networks-in-transition
