AEMC Smart Meter Rollout

AEMC Smart Meter Rollout

The Australian Energy Market Commission (AEMC) has modified the market rules promising consumers greater freedom to participate in the emerging energy services market.

The AEMC’s Power of Choice promised to empower consumers – but do the changes achieve this?

A review of the AEMC’s Market Reforms suggests they:

• Fail to support the efficient provision of new energy services

• Remove consumer freedom to choose who installs their smart meter

• Do not adequately protect consumer privacy

Highlighting the failure

The analysis starts with a rule change request made to the AEMC last year. This request asked the AEMC to consider a simple question:

Should consumers with a solar system have the freedom to select both the retailer they buy electricity from and the retailer they sell solar electricity to?

Encouragingly the AEMC found the new rules provided consumers the freedom to trade electricity with different retailers. Disappointingly their final advice revealed the new rules did not efficiently support the new energy service since Each retailer must install their own meter

Drawing a picture of the AEMC two meter solution.

The AEMC solution requires consumers to pay for two meters

The AEMC solution requires consumers to pay for two meters

The important observation is both meters in the AEMC solution make exactly the same measurement. Since both meters make exactly the same measurement it is apparent only one meter is required.

Why did the AEMC find it necessary to increase costs for consumers wishing to select such a simple new energy service?

Two reasons were identified

• The original Power of Choice promised to give consumers the freedom to select who installed their smart meter. The final rules removed this freedom of choice instead giving the exclusive right to install smart meters to the consumer’s retailer. Hence if a consumer wants a relationship with two retailers the AEMC determination shows they must pay for two meters

• During the development of the rule changes the Federal Government asked the AEMC to consider defining a common standard for all smart meters. The AEMC decided this was not required. Without a common standard there is no certainty two retailers can share one meter, hence the need to install two separate meters

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