Minister agrees to smart meter recommendations

Energy and Resources Minister Gerry Brownlee has agreed to the recommendations set out in the Electricity Commission’s report on the roll-out and requirements for smart meters in New Zealand.

The Electricity Commission was required under the Government Policy Statement on Electricity to report to the Minister on whether the roll-out of smart meters in New Zealand should be regulated, and whether the voluntary guidelines around technical aspects of smart meters were adequate.

"I have considered the Electricity Commission’s report and advice from officials, and agree with the Commission’s findings," says Mr Brownlee.

"I am satisfied the Commission's report reflects current knowledge of smart metering in New Zealand, and the views of consulted and interested parties."

The Electricity Commission has not recommended extensive regulation of smart meters, because the benefits of regulation are not considered to outweigh the costs at this time.

The Commission does, however, recommend regulating some technical standards, for example on information exchange protocols and data security, through electricity industry rules.

Mr Brownlee says he was persuaded by the Commission’s reasons for rejecting the need for extensive regulation of smart meters.

The Commission concluded that:

• There are differences in the New Zealand electricity market compared to other countries, which mean the reasons for regulating smart meters overseas do not apply to New Zealand (including the fact New Zealand already has a functioning ripple control system to manage peak load);
• The current roll-out of smart meters is happening within an acceptable timeframe;
• Smart meter technology is not fully developed and may become obsolete;
• There is a high level of compliance with the current voluntary guidelines;
• Regulating the roll-out of smart meters could create additional costs for consumers for no additional benefit.

The Parliamentary Commissioner for the Environment recently called for electricity companies to only install smart meters which had 'home area network' (HAN) capability already installed.

Mr Brownlee says HAN technology is not yet fully developed, with 'smart appliances' (that 'talk' to the electricity meter) not likely to be readily available for another 10 years.

"What this means is consumers would have to pay for a technology they would not benefit from for some years, with a real risk the installed technology may become obsolete and have to be replaced (at additional cost) during that time," says Mr Brownlee.

"With such rapidly evolving technology, there is also a real risk New Zealand may pick the wrong form of HAN capability, rendering New Zealand smart meters unable to 'talk' to smart appliances which have adopted the international standard. It is best in these fields to let the market work out what the HAN technology will be," he says.

"There's no doubt that smart meters are the way of the future and this government is committed to the roll-out of smart meters in New Zealand. That was signalled in the Ministerial Review into Electricity Market Performance last year. However, we are not going to regulate when the costs of doing so outweigh the benefits, and regulation will create costs to the consumer."
The Electricity Commission’s 'Advanced Metering Infrastructure in New Zealand: Roll-out and Requirements' report is available at: http://www.electricitycommission.govt.nz/opdev/retail/ami/index.html

ENDS

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