Ombudsman backs customer told it would cost $2,500 to cut gas connection

A South Australian solar home owner has lodged a complaint with the state’s energy ombudsman after being advised by their retailer that disconnecting from the local gas network would cost them up to $2,500 in unavoidable distribution network fees.

In a case shared with One Step Off The Grid this week on the condition of anonymity, the home owner said their retailer, Simply Energy, had also advised the household “not to bother” disconnecting from gas – due to that exorbitant fee – and to just continue paying the quarterly $89 connection fee, instead.

The home owner said that their decision to disconnect from gas entirely had been made in 2018, with no need for it in a house with rooftop solar and no gas appliances, apart from an old gas heater that had been made redundant by a reverse cycle air-con system.

This is a decision an increasing number of households are choosing to make as they invest in solar and switch to significantly more efficient and less costly electric appliances.

A recent study found that an all-electric new-build home with rooftop solar and no gas appliances could save Western Australian households up to $10,500 on energy costs over 10 years, compared to dual fuel homes without solar. And this has been mirrored in other states.

But as One Step has reported in the past, quitting gas is not as easy as it should be, particularly for households already connected to the network.

An article by New Energy Ventures’ James Allston in May of last year revealed that households in Victoria with an existing mains gas connection faced a “legal labyrinth” if they wished to go all-electric, thanks to outdated building and plumbing regulations.

In the ACT, the Territory government in 2016 had to change the law – which had mandated the delivery of gas to all new housing developments as an essential service – to pave the way for the development of a 350-home gas-free precinct being built as part of the all-electric Ginninderry Estate.

Nevertheless, this South Australian household persisted, refusing to accept either of the gas-related costs being offered up by the retailer and eventually lodging a complaint with the state’s energy and water ombudsman to help make their case.

Happily, the ombudsman has been extremely helpful in this case, first giving Simply Energy 20 days to resolve the situation without its intervention and then, when that did not work, taking over the case for the consumer – with what it looks like could be a positive result, with no new fees and a possible refund of past connection fees.

But it’s unlikely that will make a difference for the next customer that asks to disconnect from gas – whether it be through Simply Energy or any other retailer. Indeed, it’s a problem that goes well beyond the retailer to distribution network companies, construction regulations, and even state legislations.

In the ACT, EvoEnergy, which owns and operates the distributed gas network and supplies more than 150,000 customers in the Capital and neighbouring Queanbeyan in NSW, has won regulatory approval to accelerate the depreciation on its gas network, and pass on the cost to consumers.

As RenewEconomy reported earlier this month, it wants to do this because it expects many of its consumers to stop using gas, partly because of cheaper alternatives and partly because of a new ACT government mandate to reach zero emissions by 2045, which means no use of a fossil fuel such as gas. (But as Giles Parkinson explains in this RE video, customers should not be made to foot the bill for the gas death spiral, which is happening not only because gas is dirty, but also because it is not cheap.)

In the South Australia case, Simply Energy allegedly argued that it discouraged residential gas disconnection, as it could present as a cost disadvantage to the next person who lived in the home. This argument effectively puts Simply Energy on the side of a hypothetical future customer who might want to re-connect gas, rather than an actual customer that does want to disconnect from gas, and is actually experiencing an ongoing cost disadvantage, by way of quarterly payments for a service that’s not being used.

One Step Off The Grid had asked Simply Energy whether the $2,500 cost quoted in this instance was an across-the-board policy for South Australian customers or whether costs were quoted on a case-by-case basis. We also asked whether Simply Energy was supportive of customers that wanted to switch to an all-electric energy supply?

In a statement emailed to One Step Off The Grid on Thursday, a Simply Energy spokesperson said:

“We can’t comment on ongoing investigations and we are working with the customer and the Ombudsman to resolve the issue.

“We take meter abolishments very seriously. Once a meter is removed it may be difficult and costly for a customer to replace the gas lines and meter.

“If a customer requests a meter abolishment, they need to be the account holder, or have provided proof of ownership.

“Once a customer puts in a request for abolishment, we comply with State-specific scheduling requirements, which can vary and can be up to 20 business days from the date of scheduling request until completion.”

One Step also asked Simply Energy what was behind the $2,500 cost of disconnecting from the gas network. We will continue to look for an answer. In the meantime, we’d love to hear from readers if they have had similar experiences trying to go all-electric.