Ten Victorian towns to lose piped gas as operator says network is too expensive

Residents in 10 Victorian towns will be forced to use bottled gas or electrify next year after the operator said the local pipelines had become too expensive to run.

Solstice Energy, which has taken over operations previously under the name Tas Gas, told customers on Monday it would switch off its gas networks across regional Victorian towns by the end of 2026.

About 1100 customers will be affected and will receive compensation, depending on how much gas they use. They will be supported to transition from compressed natural gas (CNG) to bottled liquefied petroleum gas (LPG) or to electrify.

The affected towns are Marong, Terang, Lakes Entrance, Orbost, Heathcote, Nathalia, Swan Hill, Maldon, Robinvale and Kerang.

Marong, near Bendigo, is the biggest residential customer affected as the town accounts for about one-quarter of the 1100 customers.

Under the current arrangements, Solstice trucks CNG to a central compression station and then distributes it to homes and businesses through a local gas network in each town.

A Solstice Energy spokesperson said there had been constant increases in the cost of operating the regional networks over the past few years.

“We have been absorbing costs wherever possible, but this is no longer viable for our customers, or our business,” the spokesperson said.

“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.”

In 2023, The Age reported that Marong residents were bracing for monthly bills of $1000 after being told by Tas Gas of a price increase. One resident said they had received a quote to electrify that would cost $30,000.

The Solstice Energy spokesperson said the company would help fund and co-ordinate the switch to bottled LPG for customers who still wanted to use their existing heaters and cooktops. The company will also assist in some of the costs for those who choose to electrify their properties.

“We understand the immediate price increases may be difficult to absorb for some customers prior to the change, and we will work closely with any customers experiencing financial difficulties,” the spokesperson said.

“We will work closely with our customers to ensure a smooth change and, ultimately, we believe they will be better off with lower energy bills.”

Opposition energy spokesman David Davis said Victoria’s “anti-gas environment” had driven the decision.

“Families and small businesses will be left high and dry and forced to pay the price of Labor’s failure,” he said.

“The firm will pull the pin given the hostile climate in Victoria. [Energy and Resources Minister] Lily D’Ambrosio has set the climate and gas suppliers are leaving.”

A Victorian government spokesperson said there had been several conversations with Solstice Energy, and households that chose to electrify could benefit from the government’s discounts for solar and energy upgrades.

“Gas is not the cheap and plentiful energy source it once was – that’s why we’re helping families save money on their energy bills with cheaper electric appliances,” the spokesperson said.

“This failed gas supply arrangement was imposed on regional communities by the previous Liberal National government, and would have locked them into the most expensive energy source for decades. Under the Liberals and their approach to power bills, you’re on your own.”

The development comes after the Allan government scaled back plans to force households to replace gas appliances with electric alternatives when they reach their end of life.

Gas heating and cooktops have been excluded from the scheme. Gas hot water will be phased out from 2027 but with exemptions for homes where transitioning is too expensive or difficult.

Stricter rules will apply for rental properties from March 1, 2027. Hot water systems and heaters will need to be replaced at the end of their lives with heat pumps and reverse-cycle air-conditioners.

At the start of a new lease, all rental properties will be required to have shower heads with four-star water efficiency ratings, and draught sealing installed on all external doors, windows and wall vents. Homes with no insulation must have ceiling insulation with a minimum heat resistance rating of 5.

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