Market Review: Open

Overview

On 16 September 2021 the AEMC published a Directions paper for the Review of the regulatory frameworks for metering services.
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On 16 September 2021 the AEMC published a Directions paper for the Review of the regulatory frameworks for metering services. It sets out:

  • the key issues and challenges that are preventing the efficient installation of smart meters to achieve a  higher penetration 
  • the Commission's preliminary position on changes to the regulatory framework 
  • options and areas of focus the Commission is seeking further feedback on.

Smart meters are an enabler in delivering benefits to consumers individually, regardless of whether they choose to take up the services enabled by smart meters. Smart meters also enable an efficient and lower cost energy system and modernisation of the grid.

For these benefits to be realised, a higher penetration of smart meters is required. The current regulatory framework is not effectively and efficiently realising smart meter benefits for consumers, with split incentives and inefficiencies in the roll out. 

The Commission has identified a number of options for improving the regulatory framework for metering services. In addition, there are a number of preliminary recommendations that the Commission has made, primarily in relation to improving the consumer experience and efficiency of smart meter installations. 

Written submissions from stakeholders commenting on key questions raised in this Directions paper are requested by 28 October 2021


Review progress

Since the publication of the review’s consultation paper in December 2020, the Commission has established a Reference Group with four Sub-Reference Groups. The Sub-Reference Groups were established to progress issues analysis and policy development for the four areas of focus of the review. These four Sub-Reference Groups are:

  • Data and services
  • Installations
  • The consumer experience
  • The roll out, roles & responsibilities and incentives.

In addition, the Commission has held over 50 bilateral and multilateral meetings with stakeholders.

The AEMC has engaged Newgate Research to assess consumer attitudes towards smart meters and the services they provide. The AEMC has also engaged NERA Economic Consulting to provide advice on potential options for data access.

The final report on Newgate’s findings and a report on potential options developed by NERA are published alongside the Directions paper.


Objective and problem statement 

The AEMC together with the consumer experience sub-reference group developed the problem statement and objective for this review.

The objective is “To enable the roll out of appropriately capable smart metering to consumers in a timely, cost effective, safe and equitable way, and to ensure metering contributes to an efficient energy system capable of maximising the benefits for all consumers.” 


Background

The review seeks to examine whether the reforms introduced under the 2015 Expanding competition in metering services (Competition in metering) rule change have met expectations, whether changes to the current framework are required to improve efficiency and effectiveness and whether the framework supports the implementation of other electricity sector reform where metering services will play a key role.

The Competition in metering rule made extensive amendments to the metering-related provisions of the NER and NERR, including transferring the metering related roles and responsibilities from the distribution network service provider (DNSP) to the newly created role of the metering coordinator (MC). This rule commenced in December 2017. 

In making the Competition in metering rule, the Commission considered that metering services can be more effectively provided by entities that are operating competitively with each other. 

The rule ended the effective monopoly of DNSPs over the provision of metering services for small customers by allowing any party that meets certain registration requirements to provide those metering services. Any new or replacement meters must be an advanced or smart (type 4) meter, with the retailer responsible for arranging the metering services for its small customers by engaging an MC. DNSPs continue to be responsible for maintaining existing accumulation (type 6) and interval (type 5) meters.

In the Competition in metering final determination, the Commission recommended that the ability of small customers to appoint their own MC, and whether some form of access regulation to metering services and meter data is required be reviewed three years after the commencement of the new rules.
 

 

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