To: Australian Energy Regulator (AER)

• IEEFA has previously recommended the NSW government develop a plan to manage the phase-down of its gas distribution network, and engage with the AER to ensure Jemena’s 2025-30 access arrangement is aligned to this plan. [...] IEEFA has previously recommended that a price cap approach be maintained for gas distribution networks, as it would be inequitable to change this allocation of risk at a point in time when the existing allocation has resulted in largely one-sided benefits for networks Approach to new connection costs IEEFA supports Jemena’s proposal to require new customers to fully cover the cost of connection to. [...] However, IEEFA notes that, given the cost-competitiveness of efficient electric appliances, it is increasingly against the interests of residential customers to connect to the gas network. [...] The AER should engage with the NSW government as a matter of priority to seek clarity on its position on growth of the gas network. [...] Decommissioning Jemena’s gas network one connection at a time is likely to result in much higher costs to consumers than if a managed plan were developed to decommission larger sections of the network at a time.