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Consumers to have a say in Smart Meter charging process

The Advanced Metering Infrastructure (AMI) Cost Recovery Order in Council (CROIC) sets out the principles and procedures governing the AMI program, including the requirements to install meters under the program and the cost recovery of expenditure by distributors.

Government has made changes to the CROIC on June 30 2015, these changes are to ensure that the interests of Victorian electricity customers are protected in the final cost recovery determinations that are made by the Australian Energy Regulator (AER) under the CROIC that sets the metering charge that is passed on to customers, and in the transition to the 2016-20 revenue determination.

Smart meter charges determination process and criteria changes

Consultation on the AER's determinations will be introduced.

Since the AMI CROIC was developed, there has been a much greater focus on stakeholder consultation generally as part of regulatory processes.

To provide stakeholders including customers with an opportunity to provide their views on the distributors' transition charges, a new clause 10.1A has been inserted into the CROIC to require the AER to undertake the following process for making a transition charges determination:

  • publish distributors’ transition charges applications (and all supporting information) on its website
  • allow not less than 30 business days for submissions on the applications
  • consult with any consumer or user group that has advised that they wish to be consulted
  • make and publish a draft determination
  • allow not less than 30 business days for submission on the draft determination
  • publish all submissions received on the application and on the draft determination on its website
  • if requested, hold a public forum after publishing the draft determination
  • make and publish a final determination.

Timing of the AER's AMI transition charges determinations

Under the AMI CROIC, the AER was required to make the following two AMI transition charge determinations:

  • in 2015, based on revenue and costs in 2014, and which apply in 2016
  • in 2016, based on revenue and costs in 2015, and which apply in 2017.

The AMI CROIC required that transition charges application for 2015 be submitted by the end of August 2015, with a determination to be made within 40 business days. The timeframe for making a final determination could be extended up to the end of December.

As the new process allowing for consultation is unlikely to be able to be completed between the end of August and the end of December 2015 and furthermore, as a decision at the end of December 2015 would not provide retailers with the lead time required to incorporate the actual metering charges into their retail tariffs for the following year, the CROIC has been amended so that there will now be only one transition charges determination. This determination will be made in 2016 based on the revenue and costs in 2014 and 2015, and will apply from 2017 as part of the revenue cap for the “type 5, 6 and smart metering – regulated service”.

To enable the AER to be able to make a determination that can be considered by the retailers in setting their retail tariffs for 2017, transition charges applications will be required to be submitted between the end of April and the end of May 2016 with a determination to be made by the end of October 2016. The AER can extend the timeframe to the end of December 2016, if required.

Miscellaneous changes

In addition, the following miscellaneous changes have been made:

  • a new clause 11A.1A has been inserted that requires distributors to notify retailers immediately after transition charges have been determined;
  • a new clause 5F.1B has been inserted so that no new revised budget applications can be submitted; and
  • clause 5.7 has been amended to require the AER to provide the Minister with copies of every application, including all supporting material.

Additional provisions relating to the payment of rebates

The CROIC was amended in late 2013 to require a $125 rebate to be paid to customers where a smart meter had been installed but had not been logically converted by 30 June 2015.

Additional provisions have been included in clause 14AAA of the CROIC that:

  • allow an eligible customer, up until 31 December 2015, to request payment of the rebate directly from their distributor, where payment has not been made by 30 June 2015;
  • require distributors to publish a notice on their website to advise customers to request the rebate to be paid if it is payable but has not been paid; and
  • to pay the rebate as soon as possible after receiving a request.

These amendments have been made to allow the maximum number of rebate payments to be made to eligible customers. Customers should contact their distributor if ther consider they may be eligible for this rebate.