Inquiry to look at why gas supply fell short

AN INVESTIGATION is under way into why gas supplies to NSW were disrupted last week during a crisis that could have resulted in the shutdown of the main gas network to half a million customers.
The Minister for Energy, Ian Macdonald, ordered his department to investigate the events that left 400 large business customers with supplies only for essential operations.
Mr Macdonald is also due to meet the key players who will be asked to take part in the investigation, a spokeswoman for the minister told the Herald. While gas supplies were restored on Monday, the Government wants "to ensure the events do not re-occur", she said.
The gas network provider Alinta had warned the Government last week of the looming problem after it observed rising demand and insufficient supplies being ordered by the gas companies, including the largest supplier, AGL. The imbalance created a potentially dangerous drop in pressure in the main Moomba-to-Sydney gas pipeline.
AGL, the state's main gas company, has said the problem was caused by a big surge in demand last Tuesday during a cold snap that covered NSW, Victoria and South Australia. But yesterday an AGL spokesman said the managers of the Moomba pipeline, which include Alinta, had alerted AGL to a potential problem days before the cold snap.
When the cold snap hit, it added to pressure on the system. AGL found South Australia was talking more gas that expected from Moomba, cutting into supplies to NSW. As the supply problems greatly escalated, AGL stepped up its response, bringing gas from Victoria and shutting off gas supplies to its own power plant in South Australia.
But the measures were insufficient and AGL was forced to accept cutting supplies to its business customers last Thursday night "to ensure the safety of the network", a spokesperson said yesterday.
Normally, AGL ensures a comfortable buffer to cover a surge in demand over supply and it is still unclear how the buffer dropped so rapidly. The company said it would co-operate with the State Government inquiry.
With electricity and gas consumption soaring in Australia, the Energy Supply Association yesterday called for the removal of the energy price regulations protecting householders. The association represents the big gas and energy companies, including AGL. The association's chief, Brad Page, released a report yesterday saying energy price regulation for householders and small businesses was a "great cost" on the the community and the economy.
Mr Page said the price controls were "a substantial impediment" to cutting greenhouse gas emissions.
The State Government has begun an inquiry into electricity under Professor Anthony Owen of Curtin University. It is to report this year. Unions and consumer groups are worried the report will lead to more electricity deregulation in NSW.
Mr Macdonald said yesterday that energy deregulation in the state was a process that needed to be carefully managed. Abandoning price regulation was no guarantee of lower prices, he said. The Government would make no apologies for protecting householders and small businesses, Mr Macdonald said.