A package of reforms proposed to avoid a gas network death spiral, and to prevent customers from footing the bill for abandoned pipelines, has been described as a “profound disappointment” by consumer advocates, who say it weakens regulations while putting faith gas companies to “price reasonably.”
Energy Consumers Association (ECA), alongside the Justice and Equity Centre (JEC), requested a series of rule changes to protect consumers from a disorderly gas exit they say is already underway, as network companies long accustomed to “supernormal profits” scramble to recoup investments from a shrinking pool of customers.
The ECA and JEC sought firm changes to the settings that decide the total revenue a gas businesses can collect to cover costs, including to restrict the use of accelerated depreciation to manage network stranding risks and to cap the customer contribution to covering the cost of the network death spiral.
But in a draft rule published on Thursday, the Australia Energy Market Commission (AEMC) said it did not see the need for a fundamental redesign of regulation governing the five-year economic plans of gas networks, but rather proposes to refine, sharpen and bolster the existing rules.
