However, the regulator says bills will creep up again in the following years.
Australian Gas Networks (AGN) has cut its distribution charges, which make up more than half of the average domestic gas bill in SA, the State Government says.
The 12.4 per cent decrease will kick in from July 1 and the government has asked energy companies to pass on the savings in full to customers.
The Australian Energy Regulator confirmed its final decision on AGN’s distribution network and said it should lead to falls in residential and business bills in the coming year, if other components of the bill stays the same.
However, increases will follow next year’s cut.
“The AER’s role is to ensure that consumers pay no more than necessary for the safe and reliable delivery of gas by setting the overall revenue these businesses can recover from customers,” AER Board Member Jim Cox said.
He said a significant component of the allowed revenue was the estimated cost of financing investment to maintain a safe and reliable supply.
“Reflecting the improved financial market conditions since our last decision in 2011, the expected cost of capital has fallen leading to lower prices to customers.
“The revenue the AER has approved accounts for approximately 56 per cent of an average South Australian gas bill each year.”
If other components of the bill stayed the same, the average annual gas bill for a residential customer in South Australia would be expected to fall by about $144 in 2016-17.
However, for the next four years, annual bills would rise on average by 3.4 per cent per year.
Similarly, the average annual gas bill for a small business customer in South Australia would be expected to drop by $750 in 2016-17. For the next four years, annual bills would rise on average by 3.2 per cent per year.
“The AER expects that retailers will pass through these savings. But we also urge consumers to shop around and take advantage of competitive retail market offers to ensure they get the benefits of today’s decisions,” Cox said.
South Australian customers can compare retail offers here.
– with AAP
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