Low-income households face poverty premium through ACT electrification pathway: ACTCOSS's Gemma Killen

The same demographics are most likely to be paying more for bills due to low-energy efficient homes and have the least agency when it comes to switching energy sources, the new report found.

It highlights changes required to ensure an equitable phase-out of gas by 2045. These include identifying and prioritising those most likely to face financial barriers to replacing appliances and disconnecting from their gas supply.

Among the measures, ACTCOSS has urged the government to consider abolishing the $770-$800 disconnection fee for low-income earners or allowing a $150 temporary disconnection in some cases.

The report noted that as gas is phased out in the ACT, the last households remaining are likely to face significant gas price increases as the cost of maintaining the network recovers from a declining customer base and rising wholesale gas costs.

ACTCOSS has pushed for the ACT government to prioritise protecting vulnerable households against surging bills by setting a more ambitious target for minimal-energy efficiency rentals, ideally one that requires energy-efficient electric heating, cooling and hot water.

ACTCOSS interim CEO Gemma Killen said the ACT government is allocating three times as much money to homeowners through the Sustainable Household Scheme than is available to low-income earners through the Home Energy Support Program. ACTCOSS wants this changed.

The report found low-income households often have limited access to incentives such as rooftop solar panels and household battery storage systems due to what has been referred to as a 'poverty premium', as the upfront cost of transitioning from gas to energy-efficient electric appliances prevents them from accessing significant long-term energy savings.

Dr Killen said ACTCOSS was wary of any incentives that had an upfront cost as people were already struggling. She said an education campaign was needed now to ensure the public knew what was required of them as gas was phased out.

"2045 sounds like a long way away, but costs will rise much faster, much sooner than that," she said.

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The report acknowledged the progress the ACT government has made towards reducing inequality during the energy transition, including the Home Energy Support Program, the Energy Efficiency Improvement Scheme and the Sustainable Household Scheme. It also acknowledged the benefit of proposed laws that would ban new gas connections in some circumstances.

"While prohibiting new fossil-fuel gas connections is a key step, the biggest challenge will be to transition over 130,000 ACT households and businesses from gas to all-electric by 2045," the report found.

A survey of 1893 Canberrans found about a third of people reported having little say or influence in their energy sources; renters, apartment dwellers and those on low-incomes reported having the least influence and were less likely to have considered switching from gas.

Of respondents, 60 per cent said the cost of transitioning from gas was a barrier and more than half said rebates or incentives would encourage them to make the change.

The ACTCOSS report, A Just and Inclusive Gas Transition in the ACT, found household gas prices had risen 24 per cent over five years, with prices expected to rise by another 19 per cent over the next seven years.

Vinnies ACT chief executive officer Lucy Hohnen said the organisation already received calls from people who previously had not required support.

"In one of the most expensive cities in Australia to live, we are concerned that this price increase will only drive people to seek financial support from organisations like Vinnies," Ms Hohnen said.

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