The Minister for Energy has approved changes to the Gas Market Moratorium to reduce the threshold at which Synergy can supply gas to customers from 1 terajoule per annum to 0.18 terajoules per annum (the "Moratorium threshold"). This change will allow Synergy to supply gas to customers with annual gas bills of more than $4,000 - giving greater choice to about 2,000 additional energy consumers in Western Australia.

The Minister for Energy has approved lifting the supply threshold altogether from Verve Energy. However, unlike Synergy and Alinta, Verve Energy is precluded from retailing electricity until at least 2013, and therefore cannot offer consumers a duel fuel supply if the energy generator seeks to enter the gas retail market.

The Gas Market Moratorium Ministerial Direction, giving effect to these changes from 1 July 2007, was published in the Western Australian Government Gazette on 23 March 2007. Click on the link below to read the Ministerial Direction:

Extract from Government Gazette No.56 - Ministerial Direction on Gas Market Moratorium PDF

Moratorium Threshold

It is envisaged that when a customer transfers to Synergy, that customer is considered to remain above the Moratorium threshold into the future.  This is for practical reasons and provides for consistency with the existing arrangements for electricity contestibility.  The effectiveness of this arrangement will be monitored by the Retail Energy Market Company Limited. 

For further information on gas retail  contestability see http://www.energy.wa.gov.au/2/3178/64/competitive_gas.pm .

Background

In October 2002, a moratorium was applied to the former  Westen Power Corporation (WPC), preventing it from supplying gas to small use customers (those taking less than one terajoule of gas per year, which covers households and some small businesses).  This moratorium now applies to WPC's successor entities Verve Energy (the former WPC Generation Business Unit) and Synergy (the former WPC Retail Business Unit).

This moratorium will automatically cease once full retail contestability in electricity is introduced but can also be amended by the Government from July 2007.

In October 2002, a moratorium was applied to the former  Westen Power Corporation (WPC), preventing it from supplying gas to small use customers (those taking less than one terajoule of gas per year, which covers households and some small businesses).  This moratorium now applies to WPC's successor entities Verve Energy (the former WPC Generation Business Unit) and Synergy (the former WPC Retail Business Unit).This moratorium will automatically cease once full retail contestability in electricity is introduced but can also be amended by the Government from July 2007.

 

The Office of Energy was asked by the Minister for Energy to review and make recommendations as to whether the Moratorium on WPC should be changed to permit Synergy and Verve Energy, to sell gas to more or all customers in the Western Australian gas market, having regard to the delivery of sustainable competition in the gas and electricity markets.

 

As part of this review, the Office prepared a discussion paper on issues surrounding the Moratorium and conducted a public consultation process which ended on 2 June 2006.  The paper can be downloaded from the following link:

Gas Moratorium Issue Paper

Two submissions were received following the public consultation process, which can be downloaded via the following links:

Alinta Submission

Synergy Submission

The Minister for Energy released a media statement about the changes on 23 August 2006. Read the Minister's Statement.

Further Information

For further details about the Gas Market Moratorium, contact:

Stephen Eliot
Acting Director, Markets & Regulatory Policy Division
Office of Energy

Tel  (08) 9420 5646