AGL and Origin set for WA gas launch

Western Australian households are expected to benefit when Australia’s two largest energy companies, AGL and Origin, set up shop in the WA natural gas market this year.

Origin and AGL are poised to enter the WA residential and business gas market from July 2017, expanding the state’s list of gas retailers, which currently only includes Alinta Energy and Kleenheat.

Alinta Energy held a monopoly over household gas supply in WA until 2013 when Kleenheat entered the fray. This heralded a price war that’s credited for reducing the cost of gas to households. With the looming introduction of Origin Energy and AGL, natural gas customers will have twice as many retailers to choose from, intensifying competition and possibly driving down gas bills even further.

Former WA energy minister, Dr Mike Nahan, said late last year that the move was a win for consumers.

“Because of reforms to WA’s gas market, West Australians continue to have the opportunity to choose their gas provider and achieve substantial savings off their energy bill,” Dr Nahan said.

Neither AGL nor Origin have released any price or product information as of yet, but are taking expressions of interest in preparation for their July launch. It is expected that AGL and Origin will initially operate on the South-Western gas network, covering the state’s most populated areas from Bussleton to Geraldton. This means households in other locations with access to reticulated mains gas will remain limited to Alinta Energy.

Could WA customers soon choose their electricity company too?

Western Australia has made strides in deregulating its gas market in recent years, but the real hot topic right now is electricity. Households in the greater Perth area connected to the South-West Integrated System (SWIS) currently only have one choice of retailer – Synergy. Both sides of politics are considering breaking this monopoly, with the current energy minister, Ben Wyatt, a major advocate for full retail contestability.

“I want to get to a position where Western Australians can start making a choice about who provides them with their electricity,” Mr Wyatt said.

Alinta Energy chief executive, Jeff Dimery, says that AGL and Origin’s decision to move into the WA gas market suggests they are confident the electricity market will open up shortly as well.

“I would assume… one of the major reasons behind their entry into the West Australian market would be on the basis that we do see full retail contestability for electricity. Because I’m quite sure that the decision to enter the market wouldn’t make economic sense absent the opening up of the electricity market,” he said.

The new state government has only been in power for a few months, but with a clear agenda for deregulation, customers could possibly be able to choose their electricity company within a few years.

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