Changes to the gas industry could see it evaporating in coming years.
By Jessica Keane
Gas users could be paying an extra $220 over the next four years, due to proposed changes from The Commerce Commission.
Last Thursday, a draft for upcoming price and quality control changes to gas networks was released. This comes as the government strives for 100 percent renewable energy by 2050.
There are around 300,000 active gas connections, all in the North Island. The majority of which are residential consumers. With many sharing a connection under the same roof, a large number of individuals will be affected by these changes.
Many users favour piped gas for the price, its reliability to heat homes, and ensure a constant supply of hot water at their fingertips.
However, natural gas is just a nicer name for fossil fuel. Yes, those dreaded words. With their planet-warming greenhouse gas emissions contributing to the world's ever growing climate crisis.
These changes are a positive step for the future of New Zealand, though it leaves many gas users in the lurch.
The Commission wants gas pipeline businesses to continue delivering a safe and reliable supply to consumers over the short-term until the future of gas use in New Zealand becomes clear.
Commerce Commission Associate Commissioner Vhari McWha said they want to avoid the potential for a sharp increase in existing customers' bills as demand for natural gas is expected to reduce over time.
The Commission is set to determine price and quality factors that apply to New Zealand’s four gas pipeline businesses by the end of May 2022. The decision will take effect from 1 October 2022 and will remain until 30 September 2026.
What does this mean for you?
You will still be able to get gas for, at least, the next four years - though it will be more expensive.
After that, the future of gas looks uncertain, though the Commission will be looking into whether pipelines can be repurposed for low or no carbon gas alternatives like hydrogen to replace natural gas.
With the expected decline in gas use, the Commission is proposing increasing the price of gas for existing users to ensure gas networks have enough revenue to continue providing their usual services.
McWha said the impact of this on household gas bills would be an increase of about 4.5 percent in each year of the regulatory period.
For a typical annual household gas bill of about $1,275, this would be an increase of around $55 per year.
“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 hopes to have a clearer view of the long-term future of natural gas in four years’ time. For now, the future of gas use in New Zealand remains unclear.