Making metering smarter

Smart meters have the potential to provide a wide range of benefits to both electricity utilities and consumers, including empowering end users with the information to engage more actively with their energy consumption, and enabling innovative demand management initiatives and cost­-reflective pricing options.

However, in recent years, how best to deploy smart meters across Australia and encourage consumer uptake of their functions have been contentious issues. In light of this, the Australian Energy Market Commission (AEMC) has implemented rule changes aiming to spur a market­-led smart meter rollout by opening up competition in the metering market. In this article, we investigate the implications of this ruling and examine the current state of smart metering around Australia.

In 2012, the AEMC’s Power of Choice review presented a range of recommendations to state and federal governments aimed at enabling the National Energy Market (NEM) to meet consumer needs over the next 15­20 years and provide consumers with a wider range of options in regards to their energy use.

These recommendations included measures to expand competition in metering and related services, in order to spur smart meter uptake and encourage competitive metering suppliers to provide services at an efficient cost and consistent with consumer preferences.

In response to the review’s recommendations, the Council of Australian Governments’ (COAG) Energy Council proposed a number of changes to the National Electricity Rules.

After extensive industry consultation and consideration, the AEMC released its final rule determination, which will see significant changes to the metering market apply from 1 December 2017.

Why the changes?

Smart meters, or advanced metering infrastructure, are a key enabling technology for smarter electricity networks.

Depending on the functionality of the meter, the ability to send and receive data remotely enables data on electricity consumption, electricity outages and other information on the performance of the distribution network to be obtained almost instantaneously.

A variety of services such as remote meter reading, remote access to appliances and cost-­reflective pricing options also require smart meters.

Advanced metering can empower consumers with the information they need to monitor, manage and adjust their electricity consumption in a way that better meets their usage and price preferences. Furthermore, a wider uptake of smart meters and related energy products and services can enable measures to facilitate more efficient operation of the network.

For instance, demand management initiatives can be instrumental in enabling network providers to defer building costly extra infrastructure purely to cope with peak demand periods, meaning they do not need to pass on these costs to consumers.

However, despite the benefits of advanced metering, only a relatively small number of advanced meters for small electricity customers have been deployed outside of Victoria, where a smart meter rollout was mandated. According to the AEMC, the current National Electricity Rules contribute to discouraging smart meter deployment by allowing and potentially encouraging the continued installation of outdated accumulation meters instead.

This inhibits innovation in the NEM and means that many consumers and utilities are missing out on the benefits smart meters can provide.

The rule changes intend to combat some of the obstacles preventing smart meters from being deployed more widely, and facilitate a competitive market­-led rollout.

Making metering more competitive

The AEMC’s final ‘Expanding competition in metering and related services’ rule changes provide a new competitive framework for metering services, designed to promote innovation and investment in advanced meters that deliver valuable services to consumers.

Once the new arrangements come into effect on 1 December 2017, any suitably qualified party will be able compete to provide metering services to retailers, subject to registration requirements. Previously, only retailers and distribution network service providers (DNSPs) could do this for small customers.

Metering services covered include making sure a customer has a working meter and providing the necessary parties with metering data for billing. The rules also set out the minimum capabilities a new or replacement meter must provide.

In order to meet the minimum services specification, a meter must be capable of:

• Remote disconnection
• Remote reconnection
• Remote on­demand meter reading
• Remote scheduled meter reading
• Meter installation inquiry
• Advanced meter reconfiguration.

The meter must also be connected to a telecommunications network that enables remote access to the meter.

Additionally, the rule facilitates the commercial provision of services enabled by advanced meters, such as access to voltage and other data in real­time, to distribution businesses and third parties, while putting in place safeguards to protect consumers from unauthorised access to their metering data and services provided by their meter.

Under this market­led approach, advanced meters will be deployed where new and replacement meters are required, or where energy businesses and consumers want access to advanced metering services. However, the rule also provides certain provisions for consumers to opt out of having an existing working meter replaced with an advanced meter.

Key features of the new rule include:

• The final rule changes who has overall responsibility for metering services under the NER to promote competition in the provision of metering and related services by:

1. Transferring the role and responsibilities of the existing ‘Responsible Person’ to be provided by a new type of Registered Participant – a ‘Metering Coordinator’
2. Allowing any person to become a Metering Coordinator, subject to meeting the specific requirements
3. Permitting large customers and non-­market and exempt generators to appoint their own Metering Coordinator at distribution connection points
4. Requiring a retailer to appoint the Metering Coordinator, unless another party has appointed its own Metering Coordinator.

• It requires a Metering Coordinator to take on roles additional to those currently performed by the Responsible Person so that the security of, and access to, advanced meters and the services provided by those meters are appropriately managed.

• It specifies the minimum services that a new or replacement meter installed at a small customer’s premises must be capable of providing.

• It provides for the circumstances in which small customers may opt out of having a new meter installed at their premises.

• It clarifies the entitlement of parties to access energy data and metering data in order to reflect the changes to roles and responsibilities of parties providing metering services.

• It provides for DNSPs to continue to get the benefit of network devices installed at customers’ premises that allow them to monitor, operate or control their networks for the purpose of providing network services, provided there is sufficient space to house both the metering installation and the network device.

• It permits a retailer to arrange for a Metering Coordinator to remotely disconnect or reconnect a small customer’s premises in specified circumstances.

• It permits a retailer to arrange for a supply interruption at its customers’ premises for the purposes of installing, maintaining, repairing or replacing an electricity meter.

The state of play for smart meters around Australia 

In light of the impending changes and their hopeful implications, it is worth investigating the current state of smart meters around Australia.

While Victoria mandated a full-­scale rollout of smart meters, which is now complete with around 2.8 million meters in place, their deployment resulted in substantial controversy and consumer backlash. Among other things, this was caused by the itemisation of metering costs to consumers and a lack of effective consumer engagement, meaning consumers were unaware of the potential benefits offered by smart meters.

Partly as a result of the Victorian experience, the process of rolling out smart meters in other states has been gradual, as utilities and state governments seek to avoid similar issues, combat public distrust and misinformation, and increase the awareness of consumers to the benefits of the technology.

Nevertheless, a number of network providers and state governments across Australia have been undertaking smart meter trials and deploying advanced meters to some customers on their networks.

The NSW Government recently passed the Electricity Supply Amendment (Advanced Meters) Bill 2016, which supports a voluntary, market­-led rollout of advanced meters in NSW. This legislation also includes provisions to support the market transition to a competitive metering framework and support the new national metering arrangements provided by the AEMC rule change.

According to NSW Minister for Industry, Resources and Energy, Anthony Roberts, around 40,000 smart meters have already been installed in NSW. The new policy will help that number grow, by enabling competition and increasing the pool of available meter installers from 2,000 to potentially around 35,000 qualified electricians.

The market-­led rollout of smart meters is also intended to help more than 130,000 Solar Bonus Scheme customers transition to a more appropriate tariff arrangement with their retailer when the scheme closes at the end of 2016.

So far, a number of providers in the state have been undertaking programs to increase the number of smart meters in their networks. For instance, Origin Energy intends to begin an expanded rollout of smart meters in the coming months and AGL is currently rolling out advanced meters, accompanied by a smartphone app enabling customers to easily view and engage with their energy use, in NSW, South Australia and Queensland.

Additionally, Ausgrid has around 24,000 smart meters installed across its network from various metering trials, although not all currently have remote communications enabled. Endeavour Energy has around 10,000 in place, mostly as part of trials.

In Queensland, Ergon Energy successfully completed a trial of advanced, two­way communication equipped Paywave powercard­ operated meters in remote Indigenous communities in Wujal Wujal and Hammond Island.

Energex will begin a real­time tariff study in July 2016 to gain a greater understanding of the effects of different tariff arrangements enabled by advanced meters. The company aims to recruit a minimum of 400 residential customers on a voluntary basis in the first year of the study and to begin incorporating small business customers into the cohort from July 2017.

Meanwhile, in WA, Horizon Power has been provided with State Government funding to replace existing meters with advanced meters at all customers’ premises in 2015 and 2016, at no cost to consumers.

This rollout is considered particularly beneficial, due to the remote nature of many of the communities covered by the Horizon Power network, and the resulting high costs of sending personnel out to read meters or inspect infrastructure.

Western Power is also undertaking advanced meter trial programs, involving 9,000 smart meters installed at selected properties in the Eastern Metropolitan Region and 2,300 in Denmark and Walpole.

In the Northern Territory, Power and Water is replacing the meters used for pre­pay customers, mostly in remote communities, with more advanced meters. The replacement program will run until 2018.

TasNetworks is planning a voluntary demand-­based network tariff trial involving smart metering, in order to gain insight into how the technology can best be applied to the Tasmanian electricity network and analyse customer impact. According to the company, approximately 20 per cent of the TasNetworks metering fleet is currently advanced­-capable.

Other network providers across Australia are also undertaking various smart meter and/or demand management trials and investigations on different scales, and many install smart meters as replacement meters, for larger customers, or for smaller customers who request them.

The next steps on the road to reform

With the new rules opening up competition in metering from December 2017, and NSW taking initiative with a market­-led smart meter rollout, the tide may finally be turning for advanced metering in Australia.

Hopefully, in the coming years we will see increased uptake of advanced metering infrastructure and acceptance of smart meters by Australian consumers, paving the way for smarter, more responsive electricity networks throughout Australia.