“Find a better option:” Utility says it can no longer afford to supply piped gas in regional areas

A regional Victorian energy utility says it will support its customers to go all-electric or switch to bottled gas, “rather than continuing to raise prices” for the supply of gas through its existing network of pipelines. 

Solstice Energy, a diversified energy company majority-owned by Foresight Australia Funds Management, told customers on Monday that it will shut down the gas network supplying 10 Victorian towns by the end of 2026, because it is no longer economically viable.

The decision to shut Gas Networks Victoria (GNV), part of the Solstice Energy Group, will affect around 1100 customers across Terang, Maldon, Marong, Heathcote, Robinvale, Swan Hill, Kerang, Nathalia, Orbost and Lakes Entrance.

“We have been absorbing costs wherever possible, but this is no longer viable for our customers, or our business,” a Solstice spokesperson said on Monday in comments first reported in The Age.

“We have now had to implement a further price rise for customers, so we want to find a better option for them.

“Rather than continuing to raise prices in the future, we are instead supporting our customers switch to bottled LPG or electricity, and then closing the CNG networks by the end of 2026.”

Solstice says it will work closely with customers to ensure a smooth transition off reticulated gas and will assist with some of the costs for households switching to all-electric appliances.

The company says that whichever option a household chooses, “we believe they will be better off with lower energy bills.”

Victoria is the largest user of residential gas in Australia, but is also the first state (not counting the ACT) in the country to ban gas connections in new-build homes and to legislate a staged phase-out of gas in existing homes.

In late June, the Victorian Labor government announced that, from May 2027, owner-occupied households will be required to replace end-of-life gas hot water systems with electric heat pumps or other efficient alternatives.

In rental properties, both gas hot water systems and gas heaters must be replaced with efficient electric alternatives at end of life, from March 2027.

State opposition leader David Davis, who has described the Labor government’s home electrification push as a “war on gas,” on Monday claimed Solstice Energy’s decision was driven by the “hostile climate” in Victoria.

But a similar thing happened in Western Australia – albeit on a smaller scale – back in 2021, when the gas supplier to the coastal town of Esperance revealed it could not commercially continue to operate the reticulated gas network, and intended to cease operations the following year.

Kat Lucas-Healey, senior climate and energy advisor at Environment Victoria says the Solstice decision demonstrates the increasingly challenging economics of gas use in the home.

“Victorias gas prices have tripled in the last decade, as local Bass Strait supplies have dwindled and gas companies have taken advantage of the 2010 decision to allow large-scale exports of Australian gas overseas,” Lucas-Healey said in a statement on Monday.

“With ever-increasing gas bills and the popularity of efficient electric technologies like heat pumps, it’s not a surprise that companies are walking away from areas of the gas network.

“As gas becomes untenable it’s essential communities are in a good position to make the switch and without leaving people behind. We call on the Victorian government to prioritise the roll out of the SEC’s one stop shop services to these 10 towns affected by Solstice Energy’s decision.

“Installers need to offer competitive quotes and help people access the generous Victorian Energy Upgrades incentives that are available,” Lucas Healey says.