ESPERANCE
GAS DISTRIBUTION COMPANY
83. Mrs R.M.J. CLARKE to the Minister for Energy:
I refer to the decision by the
private gas network owner and operator the Esperance Gas Distribution Company
to stop supplying reticulated gas to its customers. Can the minister update the
house on what is being done to maintain the energy supply for the 379 affected
homes and businesses in Esperance?
Mr W.J.
JOHNSTON replied:
I thank the member for Murray–Wellington
for asking this important question; I know her deep commitment to supporting
people in the regions.
In September last year, the
operators of the gas network in Esperance gave notice that they were going to
walk away from their customers down in Esperance from 31 March this year. That
was permitted under the licensing arrangement and we are looking at that to make
sure that this situation does not arise again and that we ensure that the
licences require that it is handed over to another operator before a company
can walk away. Unfortunately, that is not the case at the minute, so this
company was able to make that decision and walk away from its customers. Please note that it was only in September last
year that the company gave us a decision about what it would be doing
with its customers down there. There are 379 affected homes and businesses, and
167 of those are Department of Communities houses.
I was pleased to attend a public
meeting in Esperance earlier this month to speak about what the plans look like
going forward. Horizon Power is now turning its strong focus to the community.
The first part of this is that we are paying a considerable amount of money to
the company involved, Infrastructure Capital Group, to keep the gas network
going for an additional 12 months. That will allow us to work with each
individual customer of the gas network, both residential and business, to sort
out an alternative energy supply. For most residential customers, that will be
electrification—that is, replacing current gas appliances with electric
appliances. This will give two advantages to those customers. The first
advantage is that they will have a lower cost for their ongoing supply because
electricity is cheaper than gas, and the second is that there will be an
improved carbon outcome because electricity has a higher renewable content and
therefore lower carbon emissions for the same amount of energy. There will be
some users for whom this will not be the pathway forward, and we will work with
them so that they can make their choice about what their future energy supply
will look like. In respect of businesses, we are working with the large users—there
are basically four large users—for which electrification is not a realistic
option, to make sure that we make the most of the opportunities for change down
there.
I am disappointed in the way that
ICG has handled this matter. There has been some commentary in the media down
there that if we had continued the previous supply arrangement, ICG would have
continued the gas supply. I make it clear: there will be a $10 million saving
for Horizon by moving to a new energy provider. Horizon never had any
relationship with the supply of gas to any of those customers down there, which
we discussed previously in here. I make the point that it would cost $25 000
per customer per annum if we had continued with the previous arrangement—that
is, for those 367 customers to continue to be supplied by ICG under the
previous arrangement. An amount of $25 000 each, per annum, for 20 years would
have been the cost to government of maintaining the previous arrangement, and
that is clearly not possible.
I
particularly want to thank Hon
Shelley Payne, a Labor member for the
Agricultural Region, who has her office in Esperance and has been
helping me to keep in touch with customers. I now urge all gas customers in
Esperance to please register their interest
through the Horizon Power website, if they have not already done so, so that
Horizon Power can work with each individual customer to make sure that
there is a proper transition arrangement from this challenging situation that has been created by a privately owned company
over which the government has no control.