The Australian Energy Regulator (AER) has released an issues paper on gas distribution network tariffs – weighted average price caps (reference tariff variation mechanism) and declining block tariffs. The issues paper considers the appropriateness of these two elements in the context of amendments to the National Energy Objective to include emissions reductions and jurisdictional policies to encourage gas customers to transition to electricity.
Invitation for submissions
We welcome submissions from interested parties on the issues paper by 16 June 2023. Written submissions or requests to make a submission via alternative methods (e.g. through a meeting with AER staff) should be emailed to aerpricing
aer [dot] gov [dot] au (aerpricing[at]aer[dot]gov[dot]au).
Register for public forum
The AER will host a public forum in late May or early June 2023, with a date to be confirmed soon. We encourage interested stakeholders to register their interest by emailing aerpricingaer [dot] gov [dot] au (aerpricing[at]aer[dot]gov[dot]au). Details about the public forum will be made available closer to the date.
Background
We determine network tariff structures and tariff levels for gas distribution networks in New South Wales, Victoria, South Australia and the Australian Capital Territory.
Existing price caps incentivise gas distributors to grow the volume of gas carried through their networks. Similarly, existing declining block tariff structures encourage customers to consume larger volumes of gas.
This review follows stakeholder feedback in our recent gas distribution access arrangement determinations, the announcement by Energy Ministers to amend the National Gas Objective to incorporate an emissions reduction objective, and jurisdictional policies encouraging gas customers to switch to electricity.