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Rule Change

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19

Making retailers meet new deadlines for installing electricity meters

06 December 2018

The Australian Energy Market Commission (AEMC) today made a rule that gives customers more control over when their electricity meter will be installed or upgraded. 

Retailers will have to provide new smart meters by a date agreed with customers. If no timing is agreed, retailers must install new meters within six working days after a property has been connected to the network.

If customers want to swap their old meter for a smart meter, retailers will have to agree on an installation time with the customer. If they cannot reach agreement, the retailer must make sure the work is done within 15 business days. Replacing a faulty meter must also be done within 15 business days. 

Failure to meet these deadlines could result in fines of up to $100,000 for each incident, and $10,000 for each day of delay.

AEMC Chief Executive, Anne Pearson, said the changes will give consumers more certainty over when their meters will be installed, and provide a strong incentive for retailers and network businesses to achieve the new mandatory timeframes.

“Hundreds of meters are being rolled out every day without any problems for most people,” Mrs Pearson said.

“More than 500,000 smart meters have been installed in NSW, South Australia, Queensland, ACT and Tasmania, since changes were made by the AEMC to enable consumers to request smart meters directly from their retailers.

“While this roll-out has been smooth for the vast majority of consumers, in some cases retailers have been too slow to have new meters installed, causing issues for homeowners particularly in cases where this prevents them from moving into their new homes.  

“That’s not good enough, so we’re stepping in to give consumers more certainty with enforceable new timeframes.”

Mrs Pearson said customers in South Australia have been most affected, as they have been particularly quick to request smart meters. Communications between the network and retailers must also be improved in that jurisdiction.

“The take-up of smart meters has been faster than anticipated, driven by both consumers and energy companies,” Mrs Pearson said.

“Giving people access to smart meters, which they didn’t have in the past, means they can better control their energy use and costs, and will make those vexed estimated meter reads a thing of the past.”

The rules place new obligations on network businesses as well as retailers. If networks are doing connection work for the customer, they will need to notify retailers as soon as they have finished, so the meter can be installed promptly. They must also use AEMO’s already established B2B e-hub, an industry-wide online booking system, to coordinate with retailers on key stages of the installation process.

Retailers and networks will be required to meet the new timeframes from 1 February 2019. The AEMC is also recommending the COAG Energy Council approves new civil penalties to protect customers if retailers or network businesses do not meet these new deadlines. 

In the meantime, regulators, ombudsman schemes and state governments will continue to work with retailers and distribution businesses to clear the backlog so customers get their new meters quickly. This includes a joint AEMC, AEMO and AER workshop on improving installation processes for industry, retailers and consumers representatives in Adelaide on 7 December 2018.

Media: Prudence Anderson, Communications Director, 0404 821 935, (02) 8296 7817
 

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Making retailers meet new deadlines for installing electricity meters

Consultation starts on rule change request seeking to remove an exemption applying to the Northern Gas Pipeline

15 November 2018

The AEMC has published a consultation paper on a rule change request from Environmental Justice Australia and the Institute for Energy Economics and Financial Analysis that seeks to remove an exemption in the National Gas Rules that applies to the Northern Gas Pipeline.

The Northern Gas Pipeline, between Tennant Creek in the Northern Territory and Mt Isa in Queensland, is currently being built by Jemena after it won a tender process run by the Northern Territory Government in 2015. The pipeline is exempt from the framework for arbitration and information disclosure due to a derogation in the National Gas Rules.

The rule change request seeks to revoke the derogation so that the Northern Gas Pipeline would need to comply with the requirements for providing information, as well as the dispute resolution procedures, set out in Part 23 of the National Gas Rules. 

Submissions are due by 13 December 2018. A draft determination is due in February 2018. 

Media: Bronwyn Rosser, Communications Specialist, 0423 280 341 or (02) 8296 7847
 

Minor changes 2

08 November 2018

On 8 November 2018, the AEMC made the National Electricity Amendment (Minor changes 2) Rule 2018 No. 11 and the National Energy Retail Amendment (Minor changes 2) Rule 2018 No. 5. These Rules were made by the AEMC to correct minor errors and make non-material changes to the National Electricity Rules (NER) and the National Energy Retail Rules (NERR). As with previous AEMC initiated rules, these minor corrections and non-material changes will make the rules clearer to stakeholders. 

Reducing bill shock by allowing meter self-reads

25 October 2018

Households without smart meters will have new rights to change estimated electricity and gas bills from next February.

Currently, energy retailers may base bills on estimated usage if meter readers have been unable to carry out an actual read because of access problems like locked gates or a dog in the yard.

The AEMC has made a new rule to make retailers accept meter reads provided by customers who think their estimated electricity or gas bill is wrong.

Retailers must also let customers know they can provide their own meter reading if they want, instead of accepting retailers’ estimates.

The rule was made to reduce the risk of customers being exposed to the financial shock of inaccurate estimated bills.

Enabling customers to do meter self-reads in these situations will reduce the risk of customers being exposed to higher bills based on overestimated energy use, or having to repay significant sums due to previous bills based on underestimated energy use. 

The rule covers small customers with gas meters or older-style accumulation electricity meters. Retailers will be able to extend this service to customers with smart electricity meters if they choose to do so for meters that can’t be remotely read.

The AEMC recommends new civil penalties if retailers fail to comply with any of the new obligations. 

Although only a small percentage (less than five per cent) of energy bills are based on estimated reads, state energy ombudsmen and consumer groups have advised that billing disputes about inaccurate estimates are one of the most frequent categories of customer complaints. 

This should diminish over time as advanced meters that are capable of being remotely read are progressively rolled out under the AEMC’s Competition in metering rule. However, there will continue to be some instances where meters need to be manually read, for example if the customer has opted out of getting an advanced meter. 

This final rule is the result of a rule change request from former Federal Energy Minister Josh Frydenberg on behalf of the Australian government. It has been consolidated with two other requests from individuals related to inaccurate estimated meter reads. The final rule addresses issues raised by all three proponents.

Allowing meter self-reads is part of a package of initiatives following the Australian Government’s round table discussions with energy retailers last year. For more information see the AEMC’s consumer protection action plan to help deliver more affordable energy by giving customers more control over their energy bills.

The new rule starts on 1 February 2019.

Media: Communication Director, Prudence Anderson, 0404 821 935 or (02) 8296 7817
 

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AEMC Initiated Rules - Minor changes 2

04 October 2018

On 4 October 2018, the AEMC gave notice under the National Electricity Law and National Energy Retail Law of its intention to initiate the Minor Changes 2 rule change proposal under the expedited rule making process.  These rules are being initiated by the AEMC to correct minor errors and make non-material changes to the National Electricity Rules and National Energy Retail Rules to improve their quality.  As with previous AEMC initiated rules, these minor corrections and non-material changes will make the rules clearer to stakeholders. 

Any written objections to the expedited process must be received by 18 October 2018. The Commission invites parties to provide submissions on the proposal by 1 November 2018.
 

Draft rule requiring generators to provide three years’ notice of closure

16 August 2018

The AEMC is seeking submissions on a draft rule that would require large electricity generators to provide at least three years’ notice before closing. The request is based on one of the recommendations in the Finkel Panel review.

The draft rule would enhance the information available to AEMO and the market on generator closures. This information would help market participants respond to possible future shortfalls in electricity generation, for example by building replacement capacity.

Specifically, the draft rule would make generators with scheduled or semi-scheduled generating units give AEMO at least three years’ notice of an intention to close, and regularly update AEMO about any changes.

This information would be included in AEMO’s medium and long-term forecasts - the MT PASA and  Electricity Statement of Opportunities reports, respectively.

The AEMC also recommends new civil penalties, enforced by the Australian Energy Regulator, if generators fail to comply with the new obligations.

The Finkel Review recommended a policy package to achieve an orderly transition to a low emissions future. The package included putting in place notice of closure requirements for large generators to help manage the retirement of existing coal-fired generators as they reach the end of their economic lives. This would provide time for replacement capacity to be built and for affected communities to plan for change.

This rule change request is being progressed as part of the Commission’s broader system security and reliability work program.

The AEMC invites stakeholders to make submissions on the draft determination and draft rule by 27 September 2018.

 

Media: Prudence Anderson, Communications Director, 0404 821 935

New rule makes AER responsible for determining values of customer reliability

05 July 2018

The AEMC today made a final rule to make the Australian Energy Regulator (AER) responsible for calculating how much electricity customers would be prepared to pay to keep the lights on. 

Knowing the value customers place on having reliable electricity supports efficient investments in generation and network infrastructure.  This new role for the AER goes to the heart of the need to balance delivery of secure and reliable power supplies while making sure consumers don’t pay more than necessary.

The value of customer reliability has only been estimated a limited number of times in the NEM, with no single body formally responsible. This has led to variations in both the methodology and the resulting estimates.  

The new rule published today requires the AER to establish values of customer reliability estimates every five years based on consumer surveys, and update these annually. The AER will develop a methodology to calculate values of customer reliability, and produce the first estimates under that methodology by 31 December 2019. 

Value of customer reliability measures play an important role in deciding and delivering a range of standards, settings and other policy parameters in the NEM. For example, these estimates are used by the Reliability Panel to decide whether the reliability standard and settings are appropriate and by the AER and network service when planning and regulating network infrastructure. 

Making the AER the single body responsible for calculating values of customer reliability will remove unnecessary duplication and improve our ongoing understanding of the value customers place on reliable electricity supply and the price they are willing to pay for it. 

A new overarching process, including a clear objective, timeframes and process for developing and reviewing the values of customer reliability methodology, will improve transparency, accountability and certainty. It will also decrease the administrative burden, particularly for stakeholders contributing to the development of values of customer reliability estimates (e.g. consumer groups).  

The rule commences on 13 July 2018 and is part of the AEMC’s security and reliability action plan to provide new tools and processes to manage the changing power system.

Media: Prudence Anderson, Communications Director, 0404 821 935.

BACKGROUND

Developing values of customer reliability 

Understanding how customers value reliability is an important consideration when planning new electricity infrastructure. A reliable supply of electricity is important to everyone: electricity interruptions can be costly, but it can also be disproportionately expensive to try to avoid them completely. 

The key is to strike a balance between delivering secure and reliable electricity supplies, and maintaining reasonable costs for electricity customers. 

A value of customer reliability (VCR) measure, represented in dollars per kilowatt-hour, indicates the value different types of customers place on having reliable electricity supplies under different conditions. VCR surveys can therefore help guide electricity planning and decisions on investments by energy businesses, governments and regulatory authorities.
 

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Have your say on new technical standards for generators to help keep the lights on at lowest cost

31 May 2018

The AEMC today proposed significant changes to technical performance standards for generators seeking to connect to the national electricity grid, and the process for negotiating those standards. 

Generators play an important role in helping AEMO and network businesses keep the lights on. This can include having the technical capability to control their voltage and frequency, and the ability to stay connected even when there is a major disturbance to the power system. 

AEMC Chairman, Mr John Pierce AO, said today’s draft rules provide a foundation for a secure, least cost transition as new generators with different technical characteristics join the power system.

“The electricity system is transitioning, with a large number of new generators like wind and solar farms set to connect in coming years. 

“We want to get the balance right between cost and system security for consumers.

“Matching technical requirements to local power system needs is key to keeping costs down for consumers," said Mr Pierce.

This major piece of work is the result of a rule change request from AEMO and months of cross-industry collaboration.

A team of technical experts comprising AEMO, generators, network businesses and power systems engineers worked with the AEMC throughout the project to systematically review each technical standard. This targeted approach will enable the standards to be negotiated for each connection – tailored to circumstances.

“For example, if provision of voltage control isn’t an issue in a particular area because there are plenty of generators providing this capability already, we don’t want to be forcing new generators connecting to the grid in that part of the system to have to pay for unnecessary voltage control capability,” said Mr Pierce. 

The draft rule tightens some standards where needed and sets clearer roles and responsibilities so all parties – generators, networks and AEMO – know what they have to do when negotiating the required standards for a particular location.

The AEMC proposes a transition period of eight weeks after the final rule is made to give everyone time to adjust, before the new performance standards apply. 

Submissions on the draft rule are due by 13 July 2018. 

This rule change request addresses a recommendation made in the Finkel review to update generator connection standards in the National Electricity Rules. It is also part of the AEMC’s security and reliability action plan to provide AEMO with the tools it needs to manage a power system with a growing share of renewables and other forms of capacity. 

This includes new rules starting in July 2018 to make networks maintain minimum levels of system strength and inertia.  

Media: Bronwyn Rosser, Communication Specialist, 0423 280 341; bronwyn.rosser@aemc.gov.au

EXPLAINER OF TECHNICAL TERMS

How are reliability and security managed in the national electricity market?
To keep the lights on, the power system needs to be:

  • secure – able to operate within defined technical limits, even if there is an incident such as the loss of a major transmission line or large generator
  • reliable - have enough generation capacity, network capacity and demand response to supply customers.

The Australian Energy Market Operator (AEMO) is responsible for operating the power system in a secure and reliable state in accordance with standards and guidelines, including those set by the AEMC’s Reliability Panel.

What is a secure power system?

The power system is in a secure and safe operating state if it is capable of withstanding the failure of a single network element or generating unit.

Security events are caused by sudden equipment failure (often associated with extreme weather or bushfires) that results in the system operating outside of defined technical limits, such as voltage and frequency.

What is a reliable power system?

A reliable power system has sufficient generation and network capacity to meet the consumer load in that region.

Reliability events are caused by insufficient generation or network capacity to meet consumer load.

Reliability events due to insufficient generation and interconnector capacity are usually predicted ahead of time by supply and demand forecasting. The associated consumer load shedding may be shared across parts of the national electricity market.

What is power system inertia?

The ability of the system to resist changes in frequency is determined by the inertia of the power system. Inertia is provided as a consequence of having spinning generators, motors and other devices that are synchronised to the frequency of the system. Historically, in the national electricity market, plentiful inertia has been provided by synchronous generators, such as coal and gas-fired power stations and hydro plant.

However, some new generation technologies, such as wind turbines and solar photo-voltaic panels, are not synchronised to the grid and have low or no physical inertia, and are therefore currently limited in their ability to dampen rapid changes in frequency.

What is system strength?

Non-synchronous generators do not contribute to system strength as much as synchronous generating units. System strength is a measure of the current that would flow into a fault at a given point in the power system.

Reduced system strength in certain areas of the network may mean that generators are no longer able to meet technical standards and may be unable to remain connected to the power system at certain times.

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Strengthening protections for customers in financial hardship: have your say

24 May 2018

The AEMC today released a consultation paper on a rule change request from the Australian Energy Regulator (AER) which aims to strengthen protections for vulnerable customers who are having difficulty paying their energy bills.

The request is an outcome of the AER’s 2017 Hardship Review which found deficiencies in how retailers implement their hardship policies. These policies are designed to help vulnerable customers pay off their debt and avoid having their electricity and gas disconnected.

The review found that many policies may not sufficiently align with the minimum requirements of retailers’ hardship obligations under the National Electricity Retail Rules. Also, many customers are not receiving adequate guidance from their retailer about their rights and entitlements.

The proposed rule change would enable the AER to develop new Customer Hardship Policy Guidelines, enforceable by civil penalties. The guidelines would set out how the minimum requirements should be applied, and make it easier for the AER to monitor and enforce retailer compliance with hardship obligations.

Stakeholders are invited to make submissions on the consultation paper by 28 June 2018.

This proposed rule change is part of a package of initiatives from ministers following the Australian Government’s round table discussions with energy retailers last year. For more information on the AEMC’s retail work program to help deliver more affordable energy for consumers see our consumer protection action plan.

See also AER news release

Media: Prudence Anderson, Communication Director, 0404 821 935 or (02) 8296 7817

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AEMC initiated rules - Minor changes 2018

20 February 2018

On 20 February 2018, the AEMC gave notice under the National Electricity Law, National Gas Law and National Energy Retail Law of its intention to initiate the Minor Changes 2018 rule change proposal under the expedited rule making process. These rules are being initiated by the AEMC to correct minor errors and make non-material changes to the National Electricity Rules, National Gas Rules and National Energy Retail Rules to improve their quality.  As with previous AEMC initiated rules, these minor corrections and non-material changes will make the rules clearer to stakeholders.

Any written objections to the expedited process must be received by 6 March 2018. The Commission invites parties to provide submissions on the proposal by 20 March 2018.

Media: Prudence Anderson, Communications Director, 0404 821 935 or (02) 8296 7817

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