Gas customers urged not to panic despite risk of shortfall

Live

Anthony Albanese has denied that the government raised a false hope of falling power bills as gas customers are warned to brace for possible shortfalls in the coming winter.

The Australian Power Market Operator has warned of risks to gas supplies in eastern states unless more production is reserved specifically for domestic use.

While its most recent report said customer demand would be met in central and eastern Australia, supply risks in areas such as Victoria remained.

The prime minister said there was pressure on household energy bills but relief action was underway.

“People understand that Australia is not immune to the impact of the war that has taken place in Ukraine. What we have done is intervene, we have not sat down and we have not done anything about it,” Albanese told ABC Radio on Friday.

“We have seen that wholesale prices are essentially half of what they would have been and what was predicted at the time of the October budget.

“That intervention has been successful, but we recognize that people are doing it tough and that it’s having an impact, but we’re also being honest with the people.”

The federal government reached an agreement with state and territory governments late last year to limit the price of coal and gas, and further relief measures will be implemented in jurisdictions to reduce energy bills.

The prime minister said models were made showing a drop in energy bills before the Russian invasion of Ukraine and related energy cost increases.

“We are not immune to that, that has had an impact here as it has around the world,” he said.

Despite concerns about potential power shortages, the market operator’s chief executive Daniel Westerman said the assessment of the gas market was not alarming for power users.

“The purpose of this report is not to worry consumers or the industry. Frankly, it’s about providing a factual basis,” he said.

“Supply is declining at a faster rate than demand. Those shortcomings as of 2027 will continue to widen as we move into the future.

“That is why we call to invest in new sources of supply to overcome those annual deficits starting in 2027.”

The news of the possible shortfall coincides with the energy regulator’s proposal for a more than 25 percent increase in energy prices for the next fiscal year.

A decision on the increase, which is forecast to be up to $1,738 per year more, will be made in May.

A parliamentary committee will hear from WA-based groups on Friday on how the country can make a successful transition from renewable energy.

The committee will also hear from the WA state government, as well as the future industries division of mining company Fortescue.

–PAA