As gas usage falls, who will be left holding the bill?

A rapid decline in gas use has placed regional communities in the North East into a “death spiral” which could see skyrocketing bills and potential network shutdowns, according to industry experts. According to a recent Grattan Institute report Out of Gas: Managing the Decline of Gas in Australia, gas use in Victoria was set to plummet 80 per cent over the next two decades as households choose to switch to cheaper electric alternatives. It reads the downturn has kickstarted a “death spiral” where network owners may start increasing prices onto customers as demand starts to decline, or in some cases shut down entirely. According to forecasts from the Australian Energy Regulator, gas bills could double by 2035 and go up 600 per cent by 2050. In an opinion piece published in the Wangaratta Chronicle, co-author of the report and deputy director of the Energy and Climate Change Program at the Grattan Institute, Hamish McKenzie, said some North East communities could potentially be exposed to quickly convert from a failing gas network with little notice. In August 2025, unregulated gas network Solstice Energy made a commercial decision to close its network to 10 Victorian regional towns and gave customers 12 months’ notice to convert their appliances to an alternative energy source. Mr McKenzie said while there was no immediate risk of this happening in the North East, Rutherglen and Chiltern communities are similarly part of a non-scheme pipeline which means gas networks have no legal obligation to keep providing gas. Despite being on regulated gas networks, other regional centres like Wangaratta would also face issues with higher fixed costs of maintaining gas pipelines fall onto fewer and fewer people, pushing up their bills. The Grattan Institute report makes seven recommendations for governments to both accelerate and better manage the phasing out of gas, which include reforming regulations on network shutdowns, splitting the multi-billion dollar cost of capping and filling old pipelines between industry, government and consumers and establishing end-dates for residential gas use. A state government spokesperson said Victoria was the first state in Australia to set out a plan for reducing gas use while maintaining affordable energy supply for regional communities. The state government recently launched a new service, Easy Electric SEC, designed to act as a central advice and referral service for households considering electrification upgrades. In its first three weeks, 50,000 Victorians have used the service. “We're helping families save money with cheaper electric appliances through Easy Electric SEC and discounts and rebates through our VEU and Solar Homes programs,” the spokesperson said. “We will also require gas distribution businesses to publish detailed, local consumption data to empower regional communities to make decisions best for them.” The state government spokesperson said the failed gas supply arrangement in August last year was imposed by the previous government. Following the shutdown, the state government adjusted the eligibility criteria for Solstice Energy customers to access Solar Homes Program. Under the National Gas Rules, gas pipeline service providers must be transparent about their operations, capacity, and pricing so that businesses looking to transport gas can negotiate fairly. Northern Victoria MP Rikkie-Lee Tyrrell said she disagreed with any premise that sees the state’s gas network close down. “The high cost of gas is partly because of the State Government’s obsession with net zero in order to ‘save the planet’,” she said. “Gas should be an important part of our energy mix, and I support increased exploration and production and greater competition in the local gas market in order to drive down prices for consumers.” Ovens Valley MP Tim McCurdy said the state government's ideological push away from gas was the real driving force behind network uncertainty and higher costs. "We support protecting consumers from unexpected network closures, but we also believe Australians should have access to affordable gas produced here at home, not pay more than overseas customers for our own resources," he said.

As gas usage falls, who will be left holding the bill?

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