Standardised Models for Regulated Metering Services

Share on twitter
Twitter
Share on linkedin
LinkedIn
Share on facebook
Facebook

The Australian Energy Regulator (AER) is developing a standardised metering services model to use in the future across all jurisdictions. The AER intends to standardise the presentation of distributors’ metering expenditure for the AER’s assessment. The outcomes sought are:

  • Better and more transparent presentation for consumers;
  • Unified understanding amongst distributors; and
  • More time-efficient processing of proposals by the AER.

Currently, the AER assesses each distributors proposal for metering models individually, including their CAPEX, OPEX, revenue and pricing models. The absence of a unified collation and presentation structure results in complexities for the AER, retailers and customers.

Different models with varying levels of complexity and information content are a significant barrier for retailers and consumers who engage with distributors’ proposals. A unified model is sought to provide for greater engagement of consumers and retailers with metering proposals.

In its Consultation Paper, the AER has published two preliminary standardised models:

  • CAPEX and OPEX Model 
  • Metering Pricing Model

The CAPEX and OPEX Model determine the distributors’ revenue requirement for the meters. The meter revenue that is generated by the models is the basis for the Metering Pricing Model, which converts the overall revenue requirement into individual prices applicable to the first year and the following years. The Metering Pricing Model is set to fit within the price cap contained in most jurisdictions.

Source AER

Source: Standardised Metering Models Consultation Paper – Australian Energy Regulator 2021.

Metering Pricing Model

Metering charges are regulated differently across jurisdictions. Most National Electricity Customer Framework (NECF) distributors are subject to price caps for interval and accumulation (type 5 and 6) metering services. In Victoria, on the other hand, a revenue cap mechanism applies to all metering services, and price caps apply to exit fees.

The proposed Metering Pricing Model provides for two things: a price cap and metering exit fees.

  • The ‘price cap’ sets caps for metering charges based on a revenue model, which considers the return of capital, OPEX, revenue adjustments, and net tax allowance.
  • The ‘metering exit fees’ provide for the consideration of the asset base for meters, communication systems and IT, forecasted CAPEX, regulatory depreciation together with administration and handling costs.

Next Steps

The AER closed submissions on 19 November 2021. The next steps will involve the AER holding a workshop with stakeholders to further develop and finalise a standardised metering model.

Key Takeaways

The Standardised Metering Models Consultation Paper provides an opportunity for retailers, embedded network providers and other stakeholders to voice the complications they encounter with metering proposals of distributors.

The models proposed are broad at this stage and offer retailers and embedded network providers the opportunity to shape the uniform guidelines in the future and avoid complications.  

More to explorer

Technicians installing photovoltaic solar panels on roof of house.

Compliance Quarter’s Submission to the AER’s Review of the Compliance Procedures and Guidelines

On 11 April 2024, Compliance Quarter put forward its submission on proposed changes to the AER Compliance Procedures and Guidelines. The AER is reviewing its Compliance procedures and guidelines, which set out the manner and form in which energy businesses in jurisdictions that have adopted the National Energy Retail Law must submit compliance information and data to the AER. We argue that there should be consideration of measures to incentivise early reporting of potential breaches. These may, for example, take the

person wearing foo dog costume

Obligations of Energy Retailers Regarding Best Offer Information

Energy retailers in Victoria have specific obligations under the Energy Retail Code of Practice to provide clear information to customers about their ‘best offer’ – that is, the plan that would minimize the customer‘s energy costs based on their usage history. The objective is to ensure small customers can easily understand whether they are on the retailer‘s best plan for them and how to access the retailer‘s best offer if not. One of the significant challenges in the energy sector (as in banking and elsewhere) is that customers

low angle photo of sydney opera house australia

Guide to the National Energy Retail Rules

The National Energy Retail Rules (NERR) are a set of rules that govern the sale and supply of electricity and gas by retailers to consumers in Australia, alongside the related National Energy Retail Law (NERL). The NERR came into effect on 1 July 2012 in Tasmania, the Australian Capital Territory, and the Commonwealth. South Australia followed on 1 February 2013, New South Wales on 1 July 2013, and Queensland on 1 July 2015. The NERR do not yet apply in

Leave a Reply

Your email address will not be published. Required fields are marked *