WA energy transition: Economic Regulation Authority approves big price hike for Dampier to Bunbury pipeline

Gas users are set to pay nearly $1 billion more across the next five years after a regulatory decision to drastically hike the price of the State’s main transmission trunk line. The Economic Regulation Authority on Thursday approved a 33 per cent increase in usage charges for the Dampier to Bunbury Natural Gas Pipeline. That will start from the 1st of January, although the move was foreshadowed months ago. It will mean pipeline owner Australian Gas Infrastructure Group rake in just less than $2.5 billion of revenue from 2026 to 2030, up from $1.54 billion in the previous five years The pipeline runs almost 1,600km from the Pilbara to Bunbury and supplies the majority of the State’s gas needs, including for the Perth metro area. The looming price rise will hit major industrial users most significantly and reflects the impact of higher inflation and the big increase in interest rates since 2022. The State Government sets a ceiling price for household gas users and transmission costs make up between 5 and 10 per cent of their bills. ERA boss Steve Edwell said there was was considerable uncertainty for natural gas demand in WA. “Long-term, gas use is expected to decline as both State and Federal governments plan for a net zero emissions future,” he said. “However, the timing and pace of this decline is unclear. “Current gas demand remains strong, and there is the possibility for growth through the development of onshore gas fields in Western Australia.” He said the regulator would ensure DBNGP’s spending would be prudent, efficient and appropriate, with $45m cut from the company’s initial proposal. Industry expert Richard Harris said the decision was reasonable as it would enable the pipeline to keep delivering gas through the energy transition. “I understand from submissions to the ERA that the increased revenue is required to enable the pipeline to be managed more flexibly going forward, delivering gas at short notice to back up renewables,” he said. “This is a new operating protocol, requiring carefully managing pipeline storage and ensuring gas is available at short notice.” A second recent change, which would allow gas to flow in both directions on the pipeline, would also benefit users, Mr Harris said.