Lessons learned from AMI rollout. Cameron O Reilly CEO 21 November 2012

Transcription

1 Lessons learned from AMI rollout Cameron O Reilly CEO 21 November 2012

2 About the Energy Retailers Association Peak body representing electricity and gas retailers in the national energy markets Members are mostly privately owned and vary in size Members are large, medium and niche retailers National coverage including WA Members have more than 10 million customers more than 3 million gas customers Most are dual fuel

3 Australian energy market reform National Competition Policy Review Committee - Hilmer Competition Policy Agreements Energy Markets Review - Parer Energy Reform Implementation Group - Scales 2007 Privatisation commenced 1995 Industry Commission inquiry led to energy market reforms National Electricity Market Price Deregulation (VIC) National Energy Customer Framework Australian Energy Market Commission (NECF) Australian Energy Regulator National Competition Policy Australian Energy Market Operator Full Retail Contestability

4 The competitive framework The current structure of the energy market Generation market Distribution market Retail market Competitive market with few existing participants. Natural monopoly market with several participants. Contestable market with multiple participants. New entrants encouraged by governments' renewable energy and other policies. New entrants restricted by government policy. New/existing entrants encouraged by price signals, government policy and market conditions. Independently governed access arrangements to enable energy distributors to purchase supply on fair and equitable terms. Network tariffs regulated by government. Customer service focus. Consumer protection laws apply. Retailers deliver CSOs like government funded rebates.

5 Price deregulation Victoria deregulated retail prices on 1 Jan 2009 Most active market in the world - 14 active retailers Consumer benefits include product innovation improved customer service and responsiveness option to shop around for better offers save on the standing price There are savings to be made if consumers are able and willing to shop around for the best offers (St Vincent de Paul Society) Other markets in the NEM

6

7 AMI rollout perceptions and reality Perception Retailers have the customer relationship Electricity/gas as a product is hard to differentiate but is an essential service Introduction of TOU pricing to residential customers of paramount importance to help manage rising peak demand and build consumer energy awareness Reality Retailers were not part of the initial AMI rollout No policy decisions made on data protections and safety concerns No clear path to implement flexible tariffs and debate centred around impacts on a few

8 AMI rollout perceptions and reality Perception Introduction of emerging technology market with new players Technology, such as smart meters, will open up opportunities to manage consumption and introduce innovative products Networks were the face of the rollout Reality NO regulatory framework for third party arrangements Technology will only work if contestability is introduced and the consumer is engaged and educated. None of these were the case Monopolies are not customer focused

9 The current landscape Current Government inherited the AMI program Developed the AMI MAC Smart meters considered as one of the technology pathways to address peak demand issues Smart portals and subsidised IHDs being rolled out to increase consumer engagement Cost reflective pricing to be introduced Campaign to change customer perceptions ( Lessons learned from Victoria used to formulate smart meter policy in other states

10 A changing landscape The market today

11 Relationship & Financial flow Physical flow The future? Distribution Transmission Energy Trading Generation Energy Retailers NEW Smart Functions Service Providers? Customer Energy Trading Centralized Generation? Information Exchange Other Service Providers Meter Data Providers What role will the retailer have?

12 ERAA- Smart meter papers ERAA released five smart meter working papers examining key policy discussions: 1. The benefits of smart meters 2. Enabling a market-driven smart meter rollout 3. Competitive neutrality 4. Privacy of personal information 5. Third party and distributor framework

13 Further information: