Submission: Australian Energy Market Commission – Consultation on rule change requests

10 July 2025

To: Australian Energy Market Commission
Re: Consultation on rule change requests:

Updating the regulatory framework for gas connections
Establishing a regulatory framework for gas disconnections and permanent abolishments

Thank you for the opportunity for the Institute for Energy Economics and Financial Analysis (IEEFA) to provide input to the aforementioned rule change requests proposed by Energy Consumers Australia (ECA) and the Justice and Equity Centre (JEC).

IEEFA is an independent energy finance think tank that examines issues related to energy markets, trends and policies. The Institute’s mission is to accelerate the transition to a diverse, sustainable and profitable energy economy.

AEMO has forecast strong declines in residential and commercial gas consumption in coming years, and recent trends point to an acceleration in policy-driven and voluntary shifts from household gas appliances towards efficient electric alternatives, which offer lower running costs.

Australia’s gas network regulations were never designed for the eventuality that large numbers of consumers might leave the network. There is an urgent need to address the questions raised in these rule change requests, to ensure that gas network regulations will enable a cost-efficient and equitable phase-down of residential gas consumption.

Some issues around the phase-down of gas will require broader policy consideration that is beyond the scope of these rule change requests. Specifically, there is a need for co-ordinated federal planning for the phase-down of gas distribution networks – with decisions made as to how stranded asset risks will be allocated, the most cost-efficient approach to physically decommission the existing residential network, and how best to serve any industrial or commercial customers that don’t yet have the ability to electrify.

Nonetheless, IEEFA’s opinion is that both ECA and JEC’s proposed rule change requests are logical, important minimum actions.

Our response to several of the consultation questions are outlined in the following pages. Please do not hesitate to contact me if you have further questions regarding this submission.

Kind regards,

Jay Gordon
Energy Finance Analyst, Australian Electricity, IEEFA