The energy landscape in Victoria is undergoing a significant transformation, with 10 regional towns set to lose their mains gas supply by the end of 2026. This development affects approximately 1,100 customers across Marong, Terang, Lakes Entrance, Orbost, Heathcote, Nathalia, Swan Hill, Maldon, Robinvale, and Kerang, raising important questions about consumer rights and legal protections under Australian energy law.
The Legal Framework Behind Gas Disconnections
Under the Victorian regulatory framework, gas distribution companies must comply with strict guidelines established by the Essential Services Commission (ESC) when discontinuing services. The Gas Distribution Code of Practice, updated in January 2025, outlines the obligations of energy retailers and distributors when making significant changes to service provision [1].
Solstice Energy’s decision to disconnect these regional networks stems from escalating operational costs that have made the compressed natural gas (CNG) distribution model financially unviable. The company has cited “constant increases in the cost of operating the regional networks” as the primary driver behind this unprecedented move [2].
Consumer Rights and Compensation Entitlements
Victorian energy consumers facing involuntary disconnection are protected under several layers of legislation. The Essential Services Commission’s consumer protection framework ensures that affected customers receive appropriate compensation and support during the transition period [3].
Property owners in the affected towns are entitled to compensation based on their historical gas usage patterns. Solstice Energy has committed to providing financial assistance for customers choosing to transition to bottled LPG or electrification, though specific compensation amounts will vary depending on individual circumstances [2].
The Energy and Water Ombudsman Victoria (EWOV) provides additional protection for consumers who believe they have been unfairly treated during the disconnection process. Under Victorian law, energy companies cannot simply terminate services without following prescribed procedures and providing adequate notice and support [4].
Transition Options and Legal Obligations
The transition away from mains gas aligns with Victoria’s broader Gas Substitution Roadmap, which aims to achieve net-zero emissions whilst maintaining energy affordability and reliability. Property owners have two primary transition pathways available:
Bottled LPG Conversion: This option allows homeowners to retain their existing gas appliances whilst switching to bottled liquified petroleum gas. Solstice Energy will assist with funding and coordinating this transition, ensuring minimal disruption to daily operations.
Full Electrification: Property owners may choose to convert entirely to electric appliances, potentially qualifying for additional government incentives under the Victorian Energy Upgrades program. However, electrification costs can be substantial, with some residents previously quoted up to $30,000 for complete conversion [2].
Regulatory Context and Future Implications
This disconnection occurs within the broader context of Victoria’s accelerated transition away from fossil gas. From January 1, 2027, new building electrification regulations will require all new residential buildings to be constructed as all-electric, with gas hot water systems being phased out across existing properties [5].
The Essential Services Commission has also implemented changes to gas connection fees, requiring customers to pay full upfront costs for new gas connections rather than sharing these costs across all gas users. This policy change, effective from January 2025, reflects the government’s commitment to reducing cross-subsidisation and encouraging electrification [1].
Property Law Considerations
From a property law perspective, the gas disconnection raises several important considerations for homeowners and investors. Properties that lose gas connectivity may experience changes in market value, particularly if alternative energy solutions are not adequately implemented.
Property owners should review their insurance policies to ensure coverage extends to any necessary modifications during the transition period. Additionally, those with existing mortgages should notify their lenders of the impending changes, as significant property modifications may trigger review clauses in loan agreements.
Legal Recourse and Support Mechanisms
Property owners who believe they have been inadequately compensated or improperly treated during the disconnection process have several avenues for legal recourse. The Energy and Water Ombudsman Victoria provides free dispute resolution services for energy-related complaints, whilst the Essential Services Commission maintains oversight of retailer compliance with consumer protection obligations [4].
For complex property-related issues arising from the gas disconnection, seeking professional legal advice is recommended. Property lawyers can assist with reviewing compensation offers, assessing impacts on property values, and ensuring compliance with any contractual obligations related to energy supply.
Conclusion
The disconnection of gas services in 10 Victorian towns represents a significant shift in the state’s energy landscape, driven by both economic realities and environmental policy objectives. Whilst the transition presents challenges for affected property owners, robust consumer protection frameworks ensure that customers receive appropriate support and compensation during this period of change.
Property owners should proactively engage with Solstice Energy regarding their transition options and seek professional advice where necessary to protect their interests throughout this process.
References:
[1] Essential Services Commission Victoria. (2025). Gas Distribution Code of Practice. https://www.esc.vic.gov.au/electricity-and-gas
[2] Rooney, K. (2025, August 4). Ten Victorian towns to lose piped gas as operator says network is too expensive. The Age.
[3] Essential Services Commission Victoria. (2025). Having trouble paying your energy bills? You have rights. https://www.esc.vic.gov.au/electricity-and-gas/information-for-electricity-and-gas-consumers/having-trouble-paying-your-energy-bills-you-have-rights
[4] Energy and Water Ombudsman Victoria. (2025). Disconnection and restriction. https://www.ewov.com.au/common-complaints/disconnection-and-restriction
[5] Victorian Government. (2025). Victoria’s Gas Substitution Roadmap.