Businesses want electrification costs covered as Solstice Energy shuts gas network
The heating, cooking equipment and water at the Maynard's restaurant run on compressed natural gas. (Supplied: John Maynard)
In short:
Solstice Energy is cutting gas supply to homes in 10 regional Victorian towns from next year.
Home owners say the cost of switching to bottled gas or electricity is exorbitant.
What's next?
An energy expert predicts more Victorian gas networks will be switched off over the coming years.
The Victorian government is being urged to subsidise regional Victorians who must convert their homes and businesses to bottled gas or electricity, after a major retailer's surprise decision to cut compressed gas supply next year.
Solstice Energy announced it would switch off compressed gas networks and stop trucking gas into 10 regional Victorian towns by the end of next year.
More than 1,100 households at Heathcote, Maldon, Marong, Swan Hill, Kerang, Nathalia, Robinvale, Terang, Lakes Entrance and Orbost will be affected.
Just spent $40,000 on gas
John Maynard and his wife Janelle run a cafe and events venue at Nathalia in northern Victoria and last year spent $40,000 installing natural gas during a renovation.
John and Janelle Maynard opened Broken Willow restaurant just over a year ago (Supplied: John Maynard)
He said his business relied on gas for heating, cooking and hot water.
Mr Maynard heard about the Solstice gas switch-off after the ABC contacted him last week.
"If I've got to put electricity in, I've got to then spend probably another $20,000, plus to get my whole wall pulled out and put electricity into my wall, which I don't have at the moment to do," he said.
Mr Maynard said he also worried that if he switched to bottle gas, it might run out during a large function.
"We'd be in a lot of trouble," he said.
John Maynard says he installed a natural gas connection a year ago. (Supplied: John Maynard)
Solstice Energy said it would support every household and business affected by the gas cuts, providing $1,000 up-front payments, gas appliance subsidies, and support to switch to bottled gas.
Those who opt to convert their homes to electricity are advised to apply for Victorian government rebates.
A Victorian government spokesperson said it was providing up to thousands of dollars in discounts for electric appliances through the Solar Homes and Victorian Energy Upgrades programs.
But Mr Maynard said that was not enough.
"A lot of small restaurants and businesses around the area are struggling as it is and we need any help we can get," he said.
Mr Maynard said he was already paying $1,500 to $3,000 a month on gas and he would lose money by closing his business to complete works for the transition.
"We'd have to be shut down for I reckon two or three weeks just to change everything over," he said.
Gas switch off 'poorly planned'
The Victorian government launched the gas substitution road map in 2022 to drive down gas usage across the state.
Victoria Energy Policy Centre head Professor Bruce Mountain said it represented a drastic change in direction, given previous Victorian government policy encouraged households to use gas.
Bruce Mountain says households should consider switching from natural gas. (ABC News: Peter Garnish)
"Households have invested. As a consequence, they have been locked into those choices," he said.
Professor Mountain said he believed Victorians should consider switching away from natural gas, as more suppliers could begin turning off supply.
"Gas is becoming more scarce, and as consumers use less, the viability of lines becomes even harder to sustain, and so they are progressively cut off,"he said.
St Vincent de Paul national energy director Gavin Dufty said the gas cuts in regional Victoria had been poorly planned.
Gavin Dufty says it is a "huge ask" for home owners to make the costly conversion. (ABC News: Clint Jasper)
"The lack of coordination between Solstice and the Victorian government to provide long-term, fit-for-purpose solutions for these communities is a glaring, glaring omission," he said.
"You've got these two different options to go to LPG — back to the future — or electrify.
"The big issue here is, they're only giving people a year and a half to make what is quite a huge decision for these households.
"In the next 20 years, we may see more gas cuts, depending on the size of the communities on the reticulated gas network and government policy.
"If you're on the gas network at the moment, when your appliance fails and all that, do consider alternatives."
'Better off in the long run'
Solstice Energy chief executive Phaedra Deckart said switching from piped gas to bottled gas or electricity would be "better for customers in the long run".
Phaedra Deckart says customers will be better off switching to bottled gas or electricity. (Supplied: Solstice Energy)
"The basis upon which the network was built assumed a much larger demand and a much greater number of customers," she said.
"We have tried everything to make this network viable, however, it is a very high-cost network to truck compressed natural gas to each of these regional towns, and ultimately, costs are going up for customers."
Solstice Energy announced a 50 per cent price increase to the 10 impacted towns last Monday.
Customers had already been hit with an 80 per cent increase in January 2023.
Ms Deckart said Solstice would need to continue raising prices every year for its compressed gas service to remain viable.