Illawarra businesses facing eye watering rises in energy bills, particularly gas, are hopeful that a recent supply deal will bring down costs, but are yet to feel any relief on prices.
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Last week, the federal government announced it had secured 260 petajoules of gas for the east coast market from the Bass Strait after an agreement was reached with suppliers Woodside and Esso.
The commitment was made under the Gas Market Code, with Woodside and Esso able to secure an exemption to the price cap through dedicating supply to the domestic market.
Energy Minister Chris Bowen said the agreement would support local businesses.
"We know that gas is critical to supporting a lower-cost, more renewable grid as ageing coal exits, and to support Australian manufacturing - which is why we've delivered this code to shore up energy reliability and affordability after a decade of chaos," he said.
One of those businesses is the Illawarra's Flagstaff Group. The not for profit disability enterprise consumes large amounts of gas to run its commercial laundry in Unanderra, and CEO Rodney Von Clark said high gas prices were a top three concern for the organisation.
"Utility costs, in particular gas, have increased substantially over the past 12 months," he said.
In the past year, gas prices have risen by 60 per cent, costing the company nearly $200,000.
While Flagstaff has installed a large solar array to supply the electricity for no cost to its paper recycling arm, there is no alternative to gas for the large boilers that produce the steam required for the commercial laundry.
Executive director of Business Illawarra Adam Zarth said high energy costs were a challenge for many Illawarra businesses, and a supply deal, if it led to reduced prices, was welcomed.
"We represent many businesses in the Illawarra that are currently struggling with the rising cost of gas, and so news of extra supply into the east coast gas market is generally a good thing," he said.
When the federal government introduced the Gas Market Code after the price of gas spiked in 2022 it came with a price cap. After negotiations with gas companies the code was amended to allow for exemptions if supply is directed to the domestic market.
Shadow energy minister Ted O'Brien said the deal amounted to little more than "business as usual" as gas from the Bass Strait was already directed to the domestic market as there are no export terminals for the gas field.
"Not a single additional petajoule of gas will be tipped into Australia due to today's announcement that wasn't already destined for the domestic market," he said.
While businesses on the east coast have struggled with high gas prices, Western Australia's gas reservation mechanism has kept prices there lower, however high prices at the end of 2023 have seen users and suppliers at loggerheads.
Australian Workers Union secretary Paul Farrow said the government should mandate certainty when it came to gas.
"These deals with Woodside and Esso join the two inked last November with Senex and APLNG, we need to see more legally enforceable deals with other gas producers operating in Australia."
After 12 months of rising utility bills, Mr Von Clark said increased competition, as well as supply, was key to getting prices to go down.
"We're always looking at negotiating and finding out where we can better deal with gas," he said.
"Anywhere we can find a reduction in the costs."
