New (smart) meters demand new protections


Deakin West, Australia — (METERING.COM) — February 9, 2010 – New protection measures will be required with the rollout of smart meters in Australia, in particular for low volume energy consumers who will encounter a proportionally higher cost increase for the rollout than will other consumers.

For these customers the price impact must be ameliorated by the introduction of concessions for smart meter charges.

These are among the conclusions of a report from the Australian branch of the St Vincent de Paul Society, which was aimed at assessing the impact of a smart meter rollout on low income and disadvantaged households. The report, “New Meters, New Protections: A National Report on Customer Protections and Smart Meters,” also consolidates data from four earlier reports focused on Victoria, New South Wales, Queensland and South Australia.

The report says that from an energy affordability perspective, the introduction of TOU pricing with smart meters will penalize many households that can ill-afford price increases. If governments decide to introduce such pricing structures due to broader market benefits, they must be clear about the impact it will have on households. They will also need to develop and introduce policies and regulation to mitigate these impacts before the new tariffs take effect.

Further price shocks will come with the costs associated with the rollout of smart meters, which are envisaged to increase the average domestic electricity bill by $80 per annum, and the cost associated with the introduction of the Carbon Pollution Reduction Scheme (CPRS), which could increase the bill by an estimated $200 – $240 per annum (varying between states).

Price shocks combined with the commitment to deregulate energy retail prices in jurisdictions where competition is found to be effective, means that the protections embedded in the new national energy customer framework (NECF) must act as the new shock absorber, i.e. the mechanism that assists households managing increased costs and price volatility. The NECF must contain universal protections that ensure customer access to flexible payment arrangements, adequate billing cycles and time to pay bills, adequate notification of changes to tariffs, and minimized use of fees and non-tariff retail charges, to mention a few.

Where state governments mandate a smart meter rollout under the National Smart Meter Project, they have the responsibility to ensure that low income households receive assistance to pay for the higher bills they may receive due to TOU pricing as well as the cost of a rollout. States will receive an increase in sales tax revenue from higher electricity prices and this revenue should be allocated to assist households struggling to pay for increased costs.

At the federal level, the Government should review their underlying energy concessions and assess their effectiveness in an environment where domestic electricity prices increase at a rate well above the CPI.

“When it comes to disadvantaged Australians, unless there is significant attention from state governments, smart meters will prove to be poor policy,” said Society national chief executive, Dr John Falzon. “We accept that new technologies must be developed but we refuse to accept that the most vulnerable in the community should bear the brunt of these changes through higher costs. Electricity is an essential social good, not just a commodity that should be left to the whims of the market.”

The reports were written for the Society by May Mauseth Johnston.