AIDE MEMOIRE
Update on the smart meter roll out
Date:
17 March 2016
Priority:
Medium
Security
In Confidence
Tracker number:
2535 15-16
Classification:
Information for Minister(s)
Hon Simon Bridges
Minister Energy and Resources
Contact for telephone discussion (if required)
Name
Position
Telephone
1st
contact
Jamie Kerr
Manager, Energy
04 901 9816
s 9(2)(a)
Markets Policy
Vanessa Head
Senior Policy Advisor,
04 901 9814
Energy Markets Policy
The following departments/agencies have been consulted
Treasury
MoJ
NZTE
MSD
TEC
MoE
MFAT
MPI
MfE
DIA
TPK
MoH
Released under the
Other:
N/A
Minister’s office to complete:
Approved
Declined
Noted
Needs change
Seen
Overtaken by Events
See Minister’s Notes
Withdrawn
Comments:
Official Information Act 1982
AIDE MEMOIRE
Update on the smart meter roll out
Date:
17 March 2016
Priority:
Medium
Security
In Confidence
Tracker number:
2535 15-16
Classification:
Purpose
To provide you with an update on the smart meter roll out.
Jamie Kerr
Manager, Energy Markets Policy
T: s 9(2)(a)
Ministry of Business, Innovation and Employment
..... / ...... / ......
Smart meter roll out
1.
‘Smart meters’ is a catch-al term for the new generation of digital electricity meters which are
replacing existing analogue meters. These new meters are more accurate and can record
electricity consumption at half hour intervals, also monitor electricity quality (voltage, outages
etc) and transmit the information directly to dedicated data management systems.
2.
Data is transferred using the same network as cel phones or via dedicated radio frequency
networks. The data is required to be encrypted and unrecognisable when in transit. The
complete package of smart meter and communications is typically referred to as advanced
Released under the
metering infrastructure (AMI).
3.
The rol out is market-led and stems from industry discussion in the 1990s on the lack of
accuracy in meter readings. Concerns about inaccurate meters sparked the roll out to
comply with a new certification of meters, which ensured accuracy.
Roll out to date
4.
In March 2010, Minister Gerry Brownlee agreed to recommendations set out in the Electricity
Commission’s report1 on the smart meter roll out and associated requirements. This
Official Information Act 1982
recommended against extensive regulation as the benefits were not considered to outweigh
the costs. It argued that smart meter technology was (and is not) ful y developed and may
become obsolete.
1 http://www.electricitycommission.govt.nz/opdev/retail/ami/index.html
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Aide Memoire No: 2535 15-16
Prepared by: Vanessa Head
In Confidence
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5.
This approach is unusual compared to international examples, such as the UK, where the
smart meter rol out is fixed to a mandated timescale with regulated technical specifications
that meters must adhere to.
6.
Minister Brownlee agreed that there should be regulation of the technical standards of the
meters, which is overseen the by Electricity Authority, through electricity industry codes. For
example, there are standards on the information exchange protocols and data security.
7.
The rol out of smart meters has, and continues to progress at a steady rate and the majority
of electricity retailers are pursuing smart meter programmes. You wil soon issue a press
release announcing that 70 per cent of al New Zealand residential connections have a smart
meter installed. It is anticipated that this figure wil reach 85-90 per cent by 2018. This is wel
ahead of many jurisdictions that have mandated the rol out, and has been achieved with no
discernible increase in costs to consumers.
Benefits
8.
While the initial benefits realised from the rol out of smart meters have been through more
accurate bil ing (including removing the need for estimated bil s) and removing the need for
meters to be manual y read, the more granular information and remote reading capability is
also now fostering innovative new services from retailers. For example, nearly all retailers
now offer services where consumers can monitor their consumption and charges via web
portals and mobile phone apps.
9.
As they receive and process customer data, retailers are in a position to offer better
electricity plans which are tailored towards the individual customer. As of February 2016, the
Authority has made consumers’ consumption data (including any half-hourly consumption
data from smart meters) and connection information available to consumers and providers of
price comparison services (when granted access by the consumer). Retailers have also
been required to make their standard tariff offers available to consumers or other parties on
request. Access to this data is expected to help people decide which electricity package best
suits them.
10. When provided with their consumption data, customers are able to identify what time of day
they are using their electricity the most. This information, together with the increasing range
of time-of-use tariffs being offered by retailers, can prompt consumers to schedule their high-
electricity-usage activities at cheaper periods. This offers the chance to save on power and
costs.
11. The benefits of smart meters and AMI are expected to evolve. One example of this is
expected to be network companies utilising the associated data to more effectively manage
Released under the
their network, and offer more targeted tariffs. Further benefits may also be realised with the
increasing availability of smarter devices and appliances that can be scheduled to use power
during periods when prices are cheaper. This could, for example, be of particular benefit
with the uptake of electric vehicles; providing customers with the information needed to
charge at cheaper times, reducing the potential impact on peak demand.
Criticisms
12. Criticism has primarily been surrounding health and privacy issues as wel as the degree to
Official Information Act 1982
which New Zealand smart meters are ‘smart’.
13. The health issues are surrounding radio frequency radiation from a smart meter. This
radiation is emitted when the meter transmits data through its communications network.
Smart meters are required to comply with the radiation exposure standards specified by the
Ministry of Health, and the emission levels from these meters has been measured as being
well within safe levels.
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Aide Memoire No: 2535 15-16
Prepared by: Vanessa Head
In Confidence
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14. The Office of the Privacy Commissioner has received a growing number of complaints
regarding smart meter readings and the transfer of data. There have been some concerns
that the data being transferred provides sufficient data that could be used to determine
whether consumers were using high-energy appliances, or when they are away from their
homes. However, power companies argue that it is not possible to gather that level of detail.
The Privacy Commissioner has determined that the data being collected is not ‘personal
information’ until it is matched with account information held by the retailer, and has
reminded retailers of their Privacy Act obligations in this regards.
15. In 2009 the Parliamentary Commissioner for the Environment (PCE) released a report into
whether New Zealand smart meters are truly ‘smart’. This was followed up with a second
report in 2013. The 2009 report argued that the roll out should be regulated to ensure
benefits were realised; specifically focusing on a component which could interact with home
devices on a ‘home area network (HAN) which was not found in the majority of meters.
16. The 2013 report pushed for more regulation, arguing that the Electricity Commission’s 2010
report “lacked transparency”. However, the PCE conceded that its 2009 report would not
have brought the assumed benefits and would have had high costs.
17. The 2013 report contained nine recommendations dealing with smart meters. You
responded to some of these recommendations in 2013 confirming that it was not necessary
to mandate particular types of meters, or functionalities, for risk that this may undermine
investment decisions and future innovation.
Released under the
Official Information Act 1982
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Aide Memoire No: 2535 15-16
Prepared by: Vanessa Head
In Confidence
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