Canberra, Australia --- (METERING.COM) --- June 17, 2008 - Australia’s energy ministers have committed to the development of a consistent national framework for smart meters in the National Electricity Market (NEM), and support distributors being responsible for the rollout of the smart meters.
At their meeting last week the Ministerial Council of Energy (MCE) agreed that while smart meter deployment in the different jurisdictions would be on varied timescales, a consistent national framework would maximize the benefits of such rollout. The technical and operational aspects of this framework will be developed through a co-regulatory model by the National Stakeholder Steering Committee (NSSC), which is currently being established. The timeline for its completion will be agreed by the end 2008.
As a critical part of the national framework, the MCE agreed that distributors are the most appropriate party to manage any obligation for an accelerated rollout. To support this, the MCE agreed that residential and small customer metering and related data management services should remain the responsibility of distributors in NEM jurisdictions for at least the rollout period.
These conclusions were based on a review of the cost benefit analysis of a national smart meter rollout in Australia. Noting the wide range of potential net benefits, but that the benefits and costs are not certain in all jurisdictions, the MCE extended it support for smart meter rollouts in Victoria and New South Wales, which should result in more than half of all Australian meters being replaced by 2017.
The MCE also agreed to further progress smart meter rollout by undertaking coordinated pilots and business case studies in most other jurisdictions (excluding South Australia and Tasmania). These pilots and business cases will be initiated as quickly as possible and their progress will be reviewed annually, starting in June 2009, with a full review by June 2012, when the MCE will further review jurisdictional deployment plans and any requirement for further analysis.
The MCE agreed that in complying with any jurisdictional obligation to rollout smart meters distributors should receive regulatory cost recovery for direct costs consistent with the revenue and pricing principles in the National Electricity Law. This cost recovery should include meters and communications infrastructure and systems required to meet service requirements, such as billing and settlement, and should be net of reasonably achievable network operational benefits to ensure that these benefits are passed directly to consumers. However, the costs and benefits of broader activities to capture the additional benefits of smart meters, such as outage management, broader systems integration or development synergies with other projects (such as smart grids) should be negotiated separately with the regulator, rather than as part of the obligation to provide smart meters.
The MCE also agreed that access to and protection of smart meter data must be closely reviewed by both the NSSC and the MCE’s consumer protection review. This should include consideration of mechanisms to ensure transparency of time-of-use data to consumers to support effective retail competition, and access to all relevant data by market operators to maximize the benefits from improved settlement and demand forecasting.
In order to meet these commitments a consistent national legislative framework within the NEM is required, including legislative support for smart meter rollout in the National Electricity Law, supporting changes to the National Electricity Rules and NEM procedures, and equivalent arrangements as relevant in Western Australia and Northern Territory (which are outside the NEM). The timeline to finalize these arrangements will be agreed by the end of 2008.
In order to maximize the consumer benefits of smart meters the MCE is undertaking a review of related impacts on and from consumer protection and safety regulation, which will be completed by May 2009. The MCE also recognizes that consumer education programs will be critical to maximizing demand response and greenhouse benefits and it will develop a significant consumer education program to be implemented as supportive to jurisdictional rollout timelines.