MEDIA RELEASE

Yarra Ranges Natural Gas Surcharge gets approval (17th AUGUST 2005)

Multinet has formally received approval to apply a surcharge, in addition to current tariffs, for natural gas to the towns in the Yarra Ranges covering the regional towns of:

The Essential Services Commission (ESC) has approved the Surcharge of $3.00 per GJ (indexed by CPI) above the 2004 Reference Tariffs approved under the current Multinet Network Tariffs. This is in accordance with section 8.25 of the National Third Party Access Code for Natural Gas Pipeline Systems.
Note that this charge for the 2005 calendar year is $3.07 GJ (and indexed by CPI each year). This surcharge will be invoiced directly to the customer's gas retailer whom will invoice the end use customer as part of their gas retail rates.

Gas Tariffs

There is no standard gas tariff in Victoria as gas tariffs vary across Victoria and may vary from one town to the next.

A gas tariff has a number of different components, levied by different companies that make up the final invoice that the end use customer receives from their gas retailer including:

A number of these tariff components can vary, which is dependent on factors such as the location, gas company and the economics of a particular project.

The final tariff to be paid in the Yarra Ranges is within the current range of tariffs charged in Victoria and is similar to tariffs applied to other recent natural gas network extensions in regional Victoria.

Under industry regulation, natural gas projects can only proceed if they are economic. Natural Gas Extension Programs can have an economic shortfall. This is generally due to the relative size of the construction costs of a distribution network compared to the amount of revenue that can be earned. The economic shortfall in the Yarra Ranges Project is funded by a combination of a State Government Grant and the tariff surcharge.

Who is this Surcharge applied to?

This surcharge is applicable to all new natural gas connections in the above nine towns. Based on an average domestic house using approximately 50 GJ per annum (using natural gas - space heater, hot water service and cooktop) this equates to approximately $150 per year additional charge (approx $3.00 per week) to the Metropolitan area.

Why is the surcharge applicable?

In order for this project to be economically viable to reticulate natural gas to the nine towns, it was necessary to apply a locational surcharge within the nine towns in addition to Multinet's residential and non- residential tariff approved under the current Access Arrangement. This surcharge was submitted as part of Multinet's submission for the project in 2004 to the Victoria State Government.

How long is it applicable for?

This surcharge has been approved until 31 December 2007. At that time it will be reviewed as part of an industry review of all distribution tariffs in Victoria. Multinet has applied for the surcharge to apply over a 20-year period and be subject to annual approval each year as part Multinet's submissions to the ESC for gas distribution tariffs.

Further information on the approval from the ESC can be found at the following website at http://www.esc.vic.gov.au/gas977.html or the MultinetGas website at www.multinetgas.com.au

For further information, please contact 1300 131 689 (business hours)