On 18 September 2025, the Commission initiated consultation on four rule change requests submitted by Energy Consumers Australia (ECA) and the Justice and Equity Centre (JEC).

The rule change requests seek changes to the National Gas Rules (NGR) to ensure that the economic regulatory framework that applies to gas distribution networks supports the long-term interests of consumers in the context of the energy transition.

The Commission is jointly consulting on the rule change requests and is seeking feedback on related issues

We are jointly consulting on the ECA and JEC rule change requests due to the interrelated nature of the issues raised and the solutions proposed. We consider that the breadth of issues and potential solutions means there is value in taking a holistic approach.

The Commission is also seeking stakeholder feedback on interrelated aspects of the NGR economic regulatory framework.

We are interested in your views on the issues raised in the rule change request and the proposed solution. Stakeholder submissions are due by 30 October 2025. Please use project code GRC0082 in your submission.

The rule change requests considered in the consultation paper are:

• Capital expenditure criteria (GRC0083). ECA propose changes to the criteria used by scheme pipelines that are gas distribution networks to propose, and the regulator to determine, whether capital expenditure is justifiable. ECA consider that the current criteria do not adequately account for an uncertain demand outlook and could result in investment in new assets that subsequently risk becoming underutilised.
• Depreciation (GRC0082). ECA propose changes to the depreciation criteria to impose stronger conditions on when scheme pipelines that are gas distribution networks can propose, and the regulator can approve, the accelerated recovery of the capital base. ECA consider that the current use of accelerated depreciation shifts all risk and costs for assets that are at risk of becoming underutilised to gas consumers, while imposing no costs or risks on gas distributors. 
• Accelerated depreciation and redundancy (GRC0088). JEC propose changes to prohibit the use of accelerated depreciation to manage capital cost recovery for assets at risk of becoming increasingly underutilised unless the regulator has undertaken a redundancy assessment. On this basis, service providers and the regulator can only use accelerated depreciation if the asset meets the proposed definition of a redundant asset, or anticipated redundant asset, and the regulator has determined how the redundant asset costs should be shared between users and a gas distributor. JEC has proposed this as an alternative to ECA's proposal to amend the depreciation criteria. 
• Planning requirements (GRC0084). ECA propose changes to impose new planning and reporting obligations on all gas distribution networks. ECA consider that stakeholders currently have limited information to understand the opportunities to minimise expenditure and energy system costs, including through the strategic decommissioning of (parts of the) gas distribution networks.

To explore the need for change to interrelated elements of the economic regulatory framework, the consultation paper is also seeking feedback on the following questions:

• Would a longer-term outlook support better decisions? We are interested in understanding whether a long-term outlook period for demand and expenditure forecasts would improve regulatory decision-making. 
• Are additional regulatory tools needed to manage demand risk? We are interested in understanding whether the regulatory tools available to manage demand risk are appropriate. 
• Are additional regulatory tools needed to manage unforeseen events or material changes? We are interested in understanding whether existing access arrangement variation mechanisms to manage these risks remain appropriate. 
• Are the existing incentives appropriate to support the transition? We are interested in understanding whether changes to the existing or additional incentives are required for gas distributors to maintain service levels in the context of uncertain gas demand.

Background

On 14 February 2025, the AEMC received three rule change requests from ECA to amend the NGR, proposing amendments to capital expenditure criteria, depreciation criteria, and planning requirements in the NGR. Separately, the AEMC is progressing ECA’s rule change request to amend the NGR to update cost sharing arrangements associated with new gas connections. Please visit the project webpage for more information.

On 4 June 2025, the AEMC received a rule change request from JEC to amend the NGR, proposing amendments to depreciation criteria and asset redundancy provisions. Separately, the AEMC is progressing JEC’s rule change request to amend the NGR to establish a regulatory framework for gas temporary disconnections and permanent abolishment. Please visit the project webpage for more information.