The Office of Energy is conducting a detailed study of gas retail tariff arrangements under the
Energy Coordination (Gas Tariffs) Regulations 2000 (the “Tariff Regulations”). This study is known as the Gas Tariffs Review. The Office of Energy has responsibility for completing the Gas Tariffs Review and preparing recommendations for consideration by the Minister for Energy.
The Office of Energy engaged consultants ACIL Tasman to provide independent advice on gas tariff setting in accordance with the Gas Tariffs Review Terms of Reference.
Draft Recommendations Report
In December 2010, the Officer of Energy released a Draft Recommendations Report on the Gas Tariffs Review seeking public feedback on the draft recommendations proposed.
Links to the Office of Energy’s Draft Recommendations Report and ACIL Tasman’s report to the Office of Energy on the Gas Tariffs Review are provided below:
Public consultation on the Draft Recommendations Report concluded on 18 February 2011. Submissions received in response to the Draft Recommendations Report can be downloaded via the links to PDF documents below:
Interim Tariff Resets
The Gas Tariffs Review commenced in 2008, but was put on hold for approximately two years pending the outcome of the wholesale gas price dispute between Alinta and the North-West Shelf Joint Venture.
In the intervening period, a number of interim tariff resets were undertaken in light of increasing cost pressures faced by retailers. The resets were required to ensure the financial viability of retailers and the continuity of retail gas supply to Western Australian small-use customers.
2010 Interim Tariff Reset
The Office of Energy prepared an Interim Report recommending adjustments to the gas tariff caps under the Tariff Regulations, to take effect on 1 April 2010.
The State Government endorsed the implementation of the recommended interim adjustments to the tariff caps, with the exception of the proposed tariffs for the Albany area, where a recommended 15% tariff increase was limited by Cabinet to a 10% tariff increase. For the Albany area, the Cabinet-approved revised supply charge was 16.81 cents/day, revised extra dwellings charge was 8.38 cents/day and revised energy charge was 12.22 cents/day.
2009 Interim Tariff Reset
The Office of Energy prepared an Interim Report recommending adjustments to the gas tariff caps under the Tariff Regulations from 1 July 2009. The Minister for Energy endorsed the implementation of the recommended interim adjustments to the tariff caps.
2008 Interim Tariff Reset
The Office of Energy prepared an Interim Report in 2008 recommending adjustments to the gas tariff caps under the Tariff Regulations from 1 July 2008. The Carpenter Government endorsed the implementation of the recommended interim adjustments to the tariff caps.
Issues Paper
On 15 February 2008, the Office of Energy released an Issues Paper on the Gas Tariffs Review and a media statement seeking public feedback on the paper.
Public consultation on the Issues Paper concluded on 14 March 2008. Submissions received in response to the Issues Paper can be downloaded via the links to PDF documents below:
Background
The Tariff Regulations cap the retail price of gas to small-use customers (residential and small business customers using less than 1 terajoule of gas per year) in the Mid-West/South-West (including the Perth metropolitan area), Albany and Kalgoorlie-Boulder supply areas.
The Gas Tariffs Review emanated from the findings of the Gas Tariff Regulations Review, which was completed by the Minister for Energy in October 2007. The Gas Tariff Regulations Review Report found that:
there was insufficient competition in the gas retail market in Western Australia to justify removal of the Tariff Regulations; and
there were upward pressures on the cost to retail gas to small-use customers in the areas covered by the Tariff Regulations. These cost pressures could impact on the viability of gas retailers and could act as a barrier to entry in the gas retail market if the tariff caps were not adjusted.
The Tariff Regulations Review Report recommended that a more detailed investigation of the level and structure of tariffs under the Tariff Regulations should be undertaken; and implications for differentiation of products and services, and the ability for customers to select appropriate products should be taken into account as part of this process. These recommendations are the genesis for the Gas Tariffs Review. Read more about the Gas Tariff Regulations Review.
