Gas Connections Are About To Get A Whole Lot More Expensive

The gas death spiral is accelerating so fast that the dwindling number of Australians still tethered to gas must be feeling dizzy (or perhaps that’s just the methane seeping in from those leaky cooktops). The number of households on gas continues to decline, with new costs set to be foisted on those who remain connected.

Why Are Australians Quitting Gas?

The number of homes connected to gas fell for a second consecutive quarter in the three months to September 2025, according to the Australian Energy Regulator, as Australians move to slash their bills by electrifying their home.

It’s not just the number of houses connected, but also the quantity of gas being consumed by homes that has dropped, SolarQuotes factchecker Ronald Brakels says.

“In the NEM (National Electricity Market), domestic gas use has fallen for around three and a half years. Mostly because it’s expensive, but that’s not the only reason. When I was growing up, many people liked gas because it let them cook and have a warm shower during blackouts. But these days the grid is more reliable, and with solar and battery, you can be certain of always having electricity. So reliability is no longer the issue it used to be,” Ronald says.

 

“On top of that, most homes now have reverse cycle air conditioners, which are a far cheaper way to heat homes than gas. We’re also no longer cooking with gas, we’re cooking with induction cookers. Or we should be, as those things are way better.”

Although the NEM doesn’t include Western Australia, Ronald says that “while gas connections have risen in WA, actual domestic gas consumption over the past three and a half years has fallen by around 9% per capita.”

Rewiring Australia analysis indicated more than 11,000 homes disconnected from gas over the past two quarters, while electricity connections increased by 62,000.

The trend is only set to continue as authorities ban new connections in a growing number of areas, while regulators move to shift the true costs of maintaining gas networks onto the shoulders of a declining number of users, accelerating the gas death spiral.

Cost Of New Gas Connections Going Up …

The Australian Energy Market Commission (AEMC) has ruled that the charge for a new gas connection needs to be reflective of the real cost, starting from October 2026.

The rule will apply to new retail customers connecting to the main gas distribution networks in NSW, SA, the ACT and South East Queensland.

AEMC reasoned that as demand from residential customers declines, a clear price signal for the true cost of maintaining the network would discourage people from locking themselves into ever-rising costs.

“As demand from residential and small commercial customers declines, and these customers leave gas distribution networks, the costs of operating and maintaining the network will be shared among a declining customer base … declining demand will have significant impacts on the prices payable by remaining customers. This may, in turn, further accelerate the decline in demand as customers who can electrify opt to do so sooner than they previously would. Continuing to add new connection costs to the capital base that must then be recovered from customers would exacerbate the risk of increasing prices faced by remaining customers who may face barriers to leave the network,” AEMC’s final determination read.

Rewiring Australia estimates the changes will see the cost of connection to gas jump to $3,000.

… But So Could The Cost Of Abolishing Gas (For Most States)

AEMC is however also close to finalising a proposal to pass the real cost of gas abolishment onto customers from 2027, meaning those left stuck on the network could find it more expensive to leave permanently.

The regulatory body has also proposed new information provision requirements to make options available to consumers clearer – including on the much cheaper option of disconnecting from gas rather than full abolishment.

The rules are expected to be finalised on the 26th of February, but the changes won’t kick in until next year.

SolarQuotes analysis in 2025 found that even before these proposed AEMC reforms, the cost of abolishment routinely exceeded $1,000 (except in price-capped Victoria), compared to under $20 typically for a disconnection.

However, the difference isn’t nearly so big in Victoria, where the cost of abolishment is capped at $242. NSW is following suit with a capped abolishment price of $250 from July this year.

Thousands of Australians are replacing their gas hot water with electric alternatives like a hot water heat pump in a bid to cut bills.

Growing Number Of Regions Banning New Gas Connections

Regardless of the cost, it might not even be possible to get a new gas connection, depending on where in Australia you live.

In recent years Victoria and the ACT banned new gas connections for new homes, and the City of Sydney followed suit at the start of this year.

As more and more areas of Australia ban gas, the costs of maintaining the network will fall on fewer and fewer gas consumers.

“It’s become a no-brainer for consumers and we’re seeing households respond accordingly, backed up by Rewiring Australia’s own research which found the average Australian home saves $4,100 per year by opting for electric appliances and cars,” Rewiring Australia CEO Francis Vierboom said recently.

By switching from gas to electric appliances, households are able to save themselves not only the cost of gas usage, but the daily connection fee. Solar homes in particular get additional savings, by replacing the cost of gas with the minimal expense of running electric appliances off solar and batteries.

However, AEMC is also mulling an increase to the cost of the daily connection charge for electricity – a potential move that has triggered a strong backlash.

For more, read our explainer from last year on how getting off gas will save you money.