15 Jun 2012 Gas
On 16 March 2012 the Commission received an application from Origin Energy for the pass through to regulated gas retail prices of costs associated with the introduction of a carbon price. The cost pass through, proposed to take effect from 1 July 2012, would apply to standing contract gas prices charged by Origin Energy.
Origin submitted that the introduction of a carbon price would impose materially higher costs in the provision of gas standing contracts under the following two categories:
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Scope 1 (or direct emissions) - Emissions that occur onsite from sources that a company owns and controls; and
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Scope 3 (or indirect emissions) - This includes emissions associated with the extraction, manufacture and production of products a company purchases.
In addition, Origin Energy sought the inclusion of a retail margin to be applied in addition to the above costs.
On 21 March 2012 Origin's application was made public for interested parties to provide comment on. Submissions were received from 6 parties and were considered during the preparation of the Commission's Final Decision.
Commission's Decision
The Commission has considered Origin Energy’s pass through application, and has approved a standing contract pass through amount of $1.47 per gigajoule for 2012/13 and $1.53 per gigajoule for 2013/14. The Commission has not accepted all of Origin Energy’s proposed wholesale and transmission carbon costs following a detailed review of those costs. It has also rejected the inclusion of a retail margin on the basis that there is no evidence that the carbon price will materially increase those costs intended to be recovered by the retail margin.
Customer Impact
The total approved carbon pass through amount will be recovered uniformly across all variable charge retail components of the gas standing contract tariffs (across all regions). For the average household using 21 gigajoules of gas per year, and who is on the Origin Energy Gas Standing Contract, it will mean an overall annual bill increase of around $31 in 2012/13 and $32 in 2013/14.
It must be noted that this increase is solely related to carbon costs; the change in gas prices on 1 July 2012 is also subject to other factors such as changing distribution tariffs. More information on the gas tariffs to apply from 1 July 2012 please refer to 2012/13 Annual Gas Retail Tariff Adjustment Project.
Related Project:
2012 Origin Energy Pass Through Application - Carbon Price
