Smart meters Australia: 1 July ruling to increase competition and consumer choice

Australia prepares for shift to smart meter market
Smart meters Australia: the new regulations aim to put more control and choice into consumers’ hands following public resistance to state-wide rollouts in Victoria

The Australian smart meter market is preparing for change as a ruling from the energy market regulator on creating more competition among suppliers and increasing consumer engagement is expected on 1 July.

The Australian Energy Market Commission (AEMC) has outlined a draft rule determination due to start next week, which will see consumers able to select if they want a meter at all, the types and cost of the meter, and a price plan, just as they might when buying a mobile phone.

Prepared by the Council of Australian Governments (COAG) Energy Council, the ruling prepared in March 2015 aims to address “the exclusivity arrangements which limit who can take responsibility for the provision of metering services, impede competition and potentially encourage the continued use of accumulation meters.”

In a summary of the draft determination, the COAG Energy Council said it has identified a number of issues with the National Electricity Rules (NER) and National Energy Retail Rules (NERR) in its rule change request that limit competition and may inhibit investment in the provision of advanced metering services.

The council also identified that certain exit fees and the structure of metering charges create a disincentive for retailers to invest in advanced meters.

Other issues identified by the COAG Energy Council related to minimum requirements for advanced meters and uncertainty over access to advanced metering services and metering data and consumer protections.

Clarity for smart meter market

Energy management company Landis+Gyr, which is active in the Australian market, said it has been waiting “for some of the policy decisions to get resolved”.

Adrian Clark, head of smart metering business Landis+Gyr in Australia and New Zealand, said a ruling would provide clarity for the market to move on and start building that smart infrastructure.

Mr Clark said a ruling from the AEMC on competition in metering services would be crucial to determine how the market would operate in the future.

Under the AEMC’s draft ruling on the new metering regulations, released in March, retailers would need to appoint a ‘metering co-ordinator’ to provide meters to their customers.

The new system aims to open up opportunities for metering suppliers in this role, or as a technology partner should a retailer decide to go into metering services itself, as AGL Energy has proposed, for example.

By 2017 all new or replacement meters would be “smart”, while retailers would be able to offer incentives to customers to have the new meters installed. 

Clark said: “For a retailer it’s now about creating that value proposition for the customer.”

Commenting on the introduction of smart meters in the state of Victoria, which prompted some consumer resistance over high installation costs, Clark said the problems emanated from decisions taken almost 10 years ago, and since that time the technology had “leapfrogged”, while the AEMC ruling placed more emphasis on the consumer, resulting in greater engagement and understanding about benefits.