Smart meters not to be extensively regulated in New Zealand


Gerry Brownlee,
Energy & Resources
Minister, New
Wellington, New Zealand — (METERING.COM) — March 16, 2010  – New Zealand’s energy and resources minister Gerry Brownlee has confirmed that smart metering in the country will not be extensively regulated.

In announcing his decision Brownlee said he agreed to the recommendations set out by the Electricity Commission in its December 2009 report on a rollout and requirements for smart meters in New Zealand.

“I have considered the Electricity Commission’s report and advice from officials, and agree with the Commission’s findings,” said Brownlee. “I am satisfied the Commission’s report reflects current knowledge of smart metering in New Zealand, and the views of consulted and interested parties.”

In its report the Commission concluded that it is not necessary to extensively regulate the rollout of AMI at this time as the benefits of regulation do not outweigh the costs. However, the Commission felt that some technical aspects of AMI systems should be regulated, including the rules on information exchange protocols and data security, as well as the operation of AMI systems in prepay mode.

In making its decision the Commission found that there are differences in the New Zealand electricity market compared to other countries, which mean the reasons for regulating smart meters overseas do not apply to New Zealand (including the fact New Zealand already has a functioning ripple control system to manage peak load). Further, the current rollout of smart meters is happening within an acceptable timeframe, and there is a high level of compliance with the current voluntary guidelines, while regulating the rollout could create additional costs for consumers for no additional benefit.

In a June 2009 report New Zealand’s parliamentary commissioner for the environment had concluded that most of the electricity generator-retailers deploying smart meters were planning to omit the functionality that is key to delivering the environmental and consumer benefits, and that regulatory intervention is needed to ensure these benefits can be delivered. In particular Morris recommended that smart meters should be supplied with real time in-home displays and a home area network (HAN) communication capability.

However, the Commission concluded that it is premature to require AMI to have a HAN interface at the time of installation now, due to the small size of the metering market in New Zealand and the limited availability of smart appliances, as well as the speed with which HAN-related technology is evolving and the costs to consumers.

“What this means is consumers would have to pay for a technology they would not benefit from for some years, with a real risk the installed technology may become obsolete and have to be replaced (at additional cost) during that time,” said Brownlee, adding: “There’s no doubt that smart meters are the way of the future and this government is committed to the rollout of smart meters in New Zealand. However, we are not going to regulate when the costs of doing so outweigh the benefits, and regulation will create costs to the consumer.”