Gas standing contract price path inquiry 2011

Status

Current status is Final

Final

The Commission has released its Final Price Determination in respect of the standing contract prices which Origin Energy Retail Ltd (Origin Energy) will be allowed to charge its South Australian gas standing contract customers over the next three years (1 July 2011 to 30 June 2014).

The standing contract is the retail gas contract that Origin Energy must offer to all South Australian small customers (customers consuming less that 1TJ per annum). Less than 30% of all small gas customers now use the standing contract as the majority of customers have elected to switch to a market contract.

Based on the Commission's Final Price Determination, a typical residential customer on the standing contract consuming 21GJ per annum would on average experience an overall annual price increase of $84 from 1 July 2011. This increase comprises both an increase in network prices, set by the Australian Energy Regulator, of $66, and an increase in the retailer component, set by the Commission, of  $18. The Commission's Final Determination focuses on the retail element of the bill, which accounts for approximately 45% of the total bill and will see the retail element of prices for both residential and small business customers moving in line with inflation (CPI) in the second and third years of the period.

In making the Final Price Determination, the Commission has reviewed the various key cost components of gas retail services, namely wholesale gas costs, transmission costs, retail operating costs and the retail margin. This review was undertaken with reference to a proposed price path put forward by Origin Energy in November 2010, which was released for public consultation. Further, the Commission has had regard to advice from independent experts on each of the cost forecasts.