Victoria’s smart meter roll out

The modernisation of Victoria’s electrical supply infrastructure is now under way as 2.2 million homes and 300,000 businesses connect to the Advanced Metering Infrastructure (AMI).

Victoria is the first state in Australia to give the go-ahead for the wide spread roll out of smart meters. Starting in September last year, the roll out of smart meters is the biggest infrastructure update for the Victorian energy sector since the poles and wires network was installed.

Smart meters are being rolled out to residential and small/medium business electricity consumers (using less than 160 MW h per annum), with more than 20,000 smart meters installed to date. The roll out is part of a larger infrastructure program – the Victorian Government’s ‘Smart Infrastructure Program’, which forms the building block for the state’s future functionality.

The smart network will support interaction with smart home-based appliances, the ability to detect when a meter is on or off supply, consumer products that can interact wirelessly with in-home devices and the potential ability to disconnect power supply at a site removing the need to send service trucks to perform the task.

“The smart meters will give families more control over what they pay for electricity and help cut bills,” Victorian Minister for Energy and Resources, Peter Batchelor said.

“The new technology will mean meters can be read remotely and power restored more quickly. As this major project moves from planning to delivery, we will continue to review the process including risks and resourcing.”

Meters are being installed by Victoria’s five electricity distributors. Retailers are expected to offer electricity tariffs to support efficient electricity consumption and are responsible for billing for energy consumption. They will also be responsible for offering a time-of-use tariff, once these become available.

Distribution businesses Jemena and United Energy Distribution (UED) have installed smart meters in Bulleen, Templestowe, Rosanna, Macleod, Heidelberg Heights, Heidelberg, Yallambie, Viewbank, Ivanhoe and Doncaster.

The UED network covers the south east suburbs and Mornington Peninsula with over 600,00 customers connected to the electricity network. The Jemena electricity network covers the north and south west suburbs with over 300,000 customers,

Jemena’s AMI and customer services general manager, Cameron Dorse told Energy Source & Distribution the most immediate benefit of smart meters will be the availability of information.

“Thirty-minute interval data from the AMI meter will be provided by Jemena and UED to energy retailers from May 2010. When retailers make this data available, for the first time, customers will have access to detailed information regarding their energy consumption and usage patterns. Having this information will enable consumers to make more informed choices about energy use, including ways to save on their bill,” Mr Dorse said.

As UED and Jemena customers transition to remotely-read AMI meters by May 2010, the infrastructure will be in place to support the use of IHD and other home area network applications. However, the timing regarding use of home applications (e.g. in-house monitors) will be largely dependent on offerings from retailers and implementation of the national smart meter program.

After the smart meters are activated, Jemena will gauge individual household reactions by conducting customer feedback surveys about the roll out process.

“Jemena and UED are committed to ensuring customers are fully informed about smart meter rollout details,” Mr Dorse said.

SP AusNet is partnering with Landis+Gyr, GE and GridNet, UXC Limited, Electrix, Motorola, Unwired, eMeter, Logica Accenture, Enterprise Business Services and Geomatic technologies to assist with delivering 680,000 smart meters.

“These partnerships allow the company to utilise WiMax technology to communicate electricity consumption, in a distinctly different approach to other Victorian electricity distribution companies,” SP AusNet managing director, Nino Ficca said.

Distributors CitiPower and Powercor began their roll out in October and have installed meters in Caroline Springs, Burnside, Delahey, Taylors Hill, Canterbury, Balwyn and Surrey Hills.

As smart meters continue to be rolled out, issues over customer service, organisation and pricing have emerged.

The Victorian Auditor-General released a report in November critical of the roll out, saying the AMI project has not used the checks and balances that would ordinarily apply to a major investment directly funded by the state and highlights a gap in the project’s accountability framework.

“There have been significant inadequecies in the advice and recommendations provided to government on the roll out of the AMI project. The advice and supporting analysis lacked depth and presented an incomplete picture of the AMI project in relation to economic merits, consumer impact and project risks,” the report states.

The report states the level of community engagement has been inadequate, given the “significant effect on consumers”.

In July 2009 the Australia Energy Regulator (AER) released its draft determination on the Distribution Network Service Provider’s (DNSP) AMI budget and charges applications for 2009-11, engaging technical consultant Energeia to assist in its review of the DNSPs’ proposed budgets. In October a final determination was released.

For a customer receiving a single phase, single element meter, the charges stemming from AER’s final determination range from $69.21 to $134.63 in 2010 and from $89.18 to $136.70 in 2011. This represents an average increase across all DNSPs of $67.97 in 2010 from 2009 charges for a customer whose meter is read quarterly, with a further average increase of $8.42 in 2011.

The audit report states the cost-benefit study behind the AMI decision was flawed and failed to offer a comprehensive view of the economic case for the project.

“There are significant unexplained discrepancies between the industry’s economic estimates and the studies done in Victoria and at the national level. These discrepancies suggest a high degree of uncertainty about the economic case for the project,” the report states.

Responding to the report, Minister Batchelor said the project was progressing well, all recommendations in the Auditor-General’s report had been accepted and many, such as an additional cost-benefit study, were already underway before the Auditor General’s report was complete.

“Three major cost-benefit studies have already been conducted through the development of this project and all have demonstrated benefits in rolling out the project,” Mr Batchelor said.

“The study currently underway uses the most up-to-date information around the project and is expected to show higher benefits than previously predicted. Benefits will accrue over time as this important project takes shape.

“We want Victorians to be able to access the full potential of smart meters, so we will continue to work with consumers to ensure they are fully informed about the benefits of the new technology,” Mr Batchelor said.