Not so smart

Hey Reader, welcome to The Energy's weekly data newsletter. This week we explore why Australian electricity meters are far from smart.

The last mile

Australian households yet to have access to a smart(er) meter are a step closer to seeing when they might get one after the Australian Energy Regulator (AER) this week published the approved replacement plans for legacy meters.

Australia’s two-speed smart meter rollout began more than a decade ago when Victoria decided to go it alone. Today, data provided by the networks shows there are almost 5 million legacy meters yet to be replaced.

Retailers now have a hard deadline of November 30, 2030 to fix this, though experts are sceptical the deadline will be met.

What have the retailers committed?

Under the electricity rules, distribution network companies, in consultation with retailers, have to show how many meters will be replaced in each of the next five years, keeping broadly in line with the regulator’s guideline of 15–25% for each 12-month period.

Some retailers have slightly front-ended the work, but broadly most of the replacements will happen in 2027-28.

The retailers are required to report on their progress to the AER each year, and in turn the AER must report on compliance “No later than five months after the end of each Interim Period”, though it’s not clear how much information will be provided. During the Victorian smart meter rollout a public dashboard was provided by which to assess progress.

A spokesperson for the AER said:

“Protecting consumers during the universal transition to smart meters by focusing on compliance with smart meter rollout requirements, resultant tariff changes and ongoing metering practices is one of the Australian Energy Regulator's current Compliance and Enforcement Priorities.”

What’s the problem?

At a very basic level, interval meters enable remote meter reading and the cost benefits that come with that, but many of the consumer promises beyond this, be it helping people better understand and manage their bills or gain access to more innovative retail options, have remained theoretical.

And the Energy and Water Ombudsman NSW (EWON) says a big part of the problem is that as a result of Power of Choice reforms where responsibility for metering was removed from distributors, consumers no longer have any relationship with metering service providers. Worse, complaints have been increasing given metering services offered by MSPs have become greatly intertwined with most of the other services that retail energy consumers receive.

“In NSW, around 46% of households had received a smart meter by mid-2024.3 However, as the saturation of smart meters increased, so has the number of complaints to EWON about estimated bills. Complaints about estimated bills now make up around 13% of all electricity complaints to EWON, compared to 2017 when they accounted for just 8.7% of complaints.”

EWON Spotlight on Metering Services

Lessons from Victoria

The legacy meter replacement plans of Victorian network companies, who have already rolled out smart meters to 99% of customers, provide some insight into other barriers that will likely be faced by interstate retailers over the next five years.

Consumer-side “defects” and refusal of smart meters have stood in the way, and there are concerns retailers will handle these issues quite differently to how distribution network companies did when they were responsible for metering.

Expert view

"Undoing the political decision of more than a decade ago to hand meters from distributors to retailers remains the only option to bring the rest of the NEM in line with Victoria. But even without that policy about-face, one tweak would markedly improve outcomes for consumers and retailers alike: allowing distributors to provide meters where retailers can't or don't want to.

Many meter installs are technically challenging or present safety issues - boards that are too small or contain asbestos, wiring that isn't compliant, access challenges, access and coordination in apartment blocks. The issues - along with the travel and communications cost of installing meter at more remote homes - are a headache for retailers, resulting in delays and reduced retail choice for households.

Many retailers aren't interested in providing meters at all - few asked for contestable metering, fewer still offered it to households as a core business. Even if we stick to contestable metering, allowing people - and retailers - to nominate a distributor to install their meter at a regulated price would help get meters installed sooner and avoid leaving more people behind in the energy transition..”

Craig Memery
Senior Adviser, Energy, Justice and Equity Centre

How smart?

Next week the Australian Energy Market Commission will release its draft determination on giving consumers access to real-time data from the meter, including a cost-benefit analysis exploring the need for data at 5 or 30-minute intervals.

And in this world, the meters that are part of the current legacy replacement plan are not very smart at all.