Consumers warned on gas prices
Consumers warned on gas prices

Thousands of WA households could be forced to pay more for their gas under a plan by the company that owns the South West's network of gas pipelines.

ATCO, the Canadian-based group that runs the reticulated gas system between Geraldton and Busselton, wants to offset falling gas consumption by charging customers more to access its infrastructure.

It has applied to the Economic Regulation Authority to significantly increase the so-called standing charge - a move gas retailers say unfairly passes costs on to them and, ultimately, consumers.

The move comes as the economic watchdog works out how much it will allow ATCO to charge customers, including Alinta Energy and Kleenheat Gas, for the next 4½ years.

The two retailers have a combined customer base of more than 630,000.

Alinta executive director of retail markets Michael Riches said ATCO's proposed shake-up would have significant implications for some consumers.

He said that if it were allowed to go ahead, Alinta "would have to seriously look at" following suit and increase the amount it charged households to access the pipes.

The ERA has noted network distribution costs, which account for up to 40 per cent of an average bill, could almost double for low-use customers under the plans.

In its submission to the ERA, rival gas retailer Kleenheat said ATCO's proposal appeared to be aimed at minimising its risks at the expense of customers.

Under WA's regulated gas network arrangements, the ERA determines ATCO's charges and how profitable it is allowed to be.

ATCO recoups some costs through the standing charge but most of its revenue comes from the amount of gas people use.

It is understood gas consumption has fallen about 7 per cent in WA over the past five years, amid warmer-than-average temperatures and as appliances become more efficient. The trend threatens to erode ATCO's profit margins.

ATCO president Alan Dixon said the proposed increase to standing charges would be accompanied by a decrease in usage tariffs, indicating bigger users could benefit.

"For the very small percentage of residential customers that use little or no gas … the proposed changes would increase the standing charge, by a maximum of $60 per year," Mr Dixon said.

The West Australian

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