Residents of Esperance face uncertainty over household energy supply

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The last thing Robert Austin needs is another expense.

Still, the pensioner’s home is one of about 400 homes in Esperance that are likely to need all the new appliances and fixtures soon.

Indeed, in exactly one year, a reticulated gas network that currently supplies these premises will close and the owners will have to run them on electricity or bottled gas instead.

“We have a budget. We have prepared everything.

“I’m pouring in enough money now as it is.”

This week, the state government told the community of Esperance it aims to provide subsidies and “not to disadvantage” affected residents.

But this plan will see Western Australian taxpayers pay the cost of subsidizing hundreds of those changes, as well as paying a gas pipeline operator an undisclosed ‘substantial amount’ to continue operations for another year .

It stems from a decision taken two years ago regarding the gas supply for the city’s brand new power station.

Robert and Helen Austin attended the community meeting in Esperance this week.(ABC News: Emily Smith)

A matter of cost

In 2020, the state government quietly approved an application for a new Esperance Power Plant.

It then awarded a long-term gas supply contract to EVOL LNG, which planned to truck gas to Esperance from Perth.

The move came as a surprise to many residents, as the former power station received gas through a pipeline, which also feeds into a reticulated network that directly supplies gas to 338 local homes and 41 businesses.

The operator of this pipeline is Esperance Gas Distribution Company (EGDC) and it has also bid to supply the new power station.

Energy Minister Bill Johnston said the government preferred EVOL LNG’s bid for one simple reason: it was significantly cheaper.

A man in a red tie in a mall surrounded by Christmas decorations
Washington State Energy Minister Bill Johnston.(ABC News: Jacob Kagi)

It is not clear whether the decision-making process took into account the potential impacts for customers on the cross-linked gas network.

Immediately after losing the contract, the EGDC indicated that, without the plant as a customer, it might not make financial sense for it to continue supplying the network with cross-linked gas.

A state government spokesperson responded by saying that if the EGDC were to stop supplying the network, it could be tasked with “removing its pipeline infrastructure at its own cost and rehabilitating the corridor”.

It’s unclear why this was the state government’s understanding or if the company will actually have to do this.

Nevertheless, in November 2021, EGDC announced to its customers that it would stop operating the cross-linked service in March 2022.

He is wearing a blue collared shirt and standing outside near the trees
Fud Mackenzie questioned the state’s energy minister at a community meeting in Esperance this week.(ABC News: Emily Smith)

This was stressful news for those involved.

Esperance resident Fud Mackenzie told the ABC he thinks it will cost him up to $40,000 to exchange his accommodation units for the cross-linked offer.

He was one of about 100 people who turned up for the community meeting at the Esperance Civic Center Thursday night in hopes of getting answers.

“The ambition of the government is not to disadvantage people”

At the meeting, Johnston and Horizon Power CEO Stephanie Unwin said those using the reticulated system are indeed expected to switch to bottled gas or electric in the coming year.

They also confirmed that the government plans to provide grants to help them do so.

It is not yet clear how much the grant will cover or how the application process will work, although Ms Unwin said the hope was to replace “like for like”, so an old device would be replaced with a new one from the same value.

But confirmation would first require Treasury approval, which she said they hoped to receive by March.

People are seated in chairs spaced apart in a room, four people stand in front to give a presentation
About 100 people attended a community meeting in Esperance this week, organized by Horizon Power and the state government.(ABC News: Emily Smith)

National Roe Party member Peter Rundle wanted a clear commitment that all resident costs would be fully covered.

The state government also bought itself some extra time, agreeing to pay the Esperance Gas Distribution Company to keep the grid system running for another year.

‘We’re spending quite a bit of money over the next 12 months to keep this going,’ Mr Johnston told the audience.

He did not say how much it would cost taxpayers.

But Mr Rundle said it was unlikely that nearly 400 premises could be converted in a year, especially with the current scarcity of craftsmen and equipment, and wondered what would happen if that time frame did not was not respected.

The state government is expected to provide more updates and hold another community meeting in the near future.

Energy Minister Bill Johnston was not available for comment.

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