10 Feb 2022

Commerce Commission proposes letting gas maintenance costs be brought forward

2:23 pm on 10 February 2022

Gas customers could be paying an average of 4.5 percent more for supply in each of the next four years as the country transitions to renewable energy.

Vegetable steamer on a gas hob.

(File image) Photo: 123RF

The Commerce Commission was proposing to let the four gas line companies bring forward the costs required to maintain services, while there was still a large pool of gas customers.

"A key feature of our draft decision is to bring some of that cost recovery forward to manage this transition and to avoid a sharper potential increase in consumer bills later," said associate commissioner Vhari McWha.

Frontloading would spread costs over a larger pool of customers, as numbers were expected to gradually decline as the country neared its 100 percent renewable target.

An increase of about 4.5 percent, when averaged across all household consumers, would cause an annual gas bill of about $1275 to increase by about $55 in each of the four years covered by the regulatory period.

"We have considered the impact on consumers in determining how much revenue should be brought forward and balanced this against the need for businesses to invest in the networks to continue to provide the services at a level that consumers demand," McWha said.

"We recognise that this will have an impact on some of New Zealand's most vulnerable users of natural piped gas and have limited the size of the increase with that in mind."

The commission was inviting feedback on the proposed change until 10 March with any changes to take effect from 1 October.

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