Cash for gas: Networks offer rebates, cash bonuses to keep home fossils burning

As governments incentivise households to switch out old gas appliances for efficient electric alternatives, gas companies are luring customers in the other direction, with the offer of rebates on “major” new gas appliances and cash bonuses for connecting to the fossil gas network.

Gas distribution company Jemena Energy was last week singled out by green groups for offering financial incentives to customers to switch everyday appliances to gas, despite the overwhelming evidence that this is a higher cost, higher emissions option.

The company’s Natural Gas Cash Back program offers NSW customers a $500 rebate for replacing a non-gas heater with ducted gas heating and a $400 rebate to replace electric hot water with gas, among other offers.

“Jemena is locking in carbon pollution by continuing to connect appliances in homes to fossil fuel gas infrastructure,” said Nature Conservation Council policy and advocacy director Brad Smith in a statement.

“This company knows that its customers could save money and reduce pollution by switching to electric appliances, yet it is trying to lock people into a more expensive and destructive source of energy.”

Jemena, of course, is not alone. The gas industry and its lobby groups both in Australia and globally have been making increasingly desperate attempts to stem the rising tide of electrification.

Just this week, as the ACT government voted through legislation to ban the connection of new homes and businesses to the gas network, a new national media counter-offensive was being launched by the Master Plumbers Australia and New Zealand, warning electrification would result in blackouts and general “insanity.”

Earlier this year, Gas Energy Australia used highly questionable modelling to claim that the cost of switching some homes from gas to electric could reach $50,000 and lead to higher emissions than if the household stuck with gas.

Modelling from Rewiring Australia has estimated that to electrify everything and power it with solar will remove 40 per cent of the nation’s domestic economy emissions and save the average household $3000-5000 per year.

Governments – for the large part – appear to be taking their advice from the likes of Rewiring Australia, rather than the gas lobby, with more and more going down the policy path of pushing gas out of the home energy supply.

“In Victoria, the state government is offering initiatives through its Solar Victoria and Victorian Energy Upgrades programs to help people transition away from gas to energy efficient electric homes,” said Bronya Lipski, policy and advocacy manager at Environment Victoria.

“But in NSW, this perverse scheme from Jemena is undermining such progress.”

Again, however, Jemena is not alone. Victorian gas distribution company Multinet is doing much the same thing – offering customers a range of rebates “to connect to natural gas and install natural gas appliances.”

Much like Jemena, Multinet offers $500 off the price of ‘major’ gas appliances such as hot water, home heating and pool heating, and a $100 rebate for ‘minor’ appliances like cooktops and BBQs.

A $500 “Connection Bonus” is also on offer as a once-off payment to an existing property that connects to natural gas for the first time.

Interestingly, Multinet specifies that the intention of this network connection bonus “is to help offset costs for consumer pipework.” But gas companies have not been so generous in allaying the cost of network disconnection.

Rather, in Victoria, it has taken an intervention from the Australian Energy Regulator to stop gas companies from charging exorbitant disconnection fees that were disincentivising households from properly disconnecting from the network.

The AER has proposed to cap the upfront cost of gas network connection abolishment at $220 to reduce the amount paid by the disconnecting household and spread the remaining cost across all gas users.

“Socialising costs in this way helps to address the safety risk of leaving ‘live’ but unused assets in place by removing the incentive for customers seeking to avoid the high cost of permanent abolishment when a connection is no longer required,” said AER chair Clare Savage of the decision.

But as Savage also said, it will ultimately be up to governments to “set clear policy direction on the future use of gas in order to facilitate a safe, reliable and affordable transition.”

Until the policy is there, it looks like the gas lobby will “naturally” continue to use its money and incumbency to keep keep customers connected.

“The gas lobby is pushing back with everything they have,” says Lipski. “They are launching a multi-million dollar ad campaign to protect their record profits.

“This is industry propaganda designed to deflect attention away from climate and health science, and directly challenge government ambition to ensure emissions reductions and renewable energy targets are met.

“We know that efficient electric appliances, powered by renewable energy are what’s needed for a safe climate – not cash handouts to keep polluting.”