Power of Choice: a new framework for competitive metering services

Author Alister Alford

Date October 2017

From 1 December 2017, implementation of the Power of Choice initiative ‘Expanding competition in metering and related services’ will enable consumers with large market meters to determine how metering services are delivered.  For large market customers this represents a change to the Rules under which the NEM operates simplifying implementation across jurisdictions. The Power of Choice changes regarding small customer metering and embedded networks, on the other hand, include elements that in some jurisdictions are inconsistent with existing legislation and require changes on a state by state basis.

In this article we outline the changes for large customer metering,what is required of large energy users and the advantages that can result.

Large market consumers (typically >100MWh/yr) in the National Electricity Market will be required to nominate a Metering Coordinator by December. This fulfils a newly created role which coordinates the provision of metering equipment, collection of metering data and metering services contract management. The Metering Coordinator will be independent of both the network business and the electricity retailer. Under the new framework the Metering Coordinator will undertake many activities that were performed by the Responsible Person (RP) which is typically the retailer financially responsible for the load. 

The new role provides consumers the opportunity to choose a Metering Coordinator who will appoint:

  • a Metering Provider (MP) for metering installation and maintenance
  • a Metering Data Provider (MDP) for meter data activities.

The Metering Coordinator will take responsibility for:

  • Contract management of metering service providers
  • Billing and payments for metering services
  • Managing service levels, rule compliance and performance reporting.

What are the advantages for large energy users?

Many large market customers have entered into direct metering agreements or contestable customer metering agreements with an independent metering services provider to take advantage of:

  • dealing with a single point of contact
  • cost savings
  • platforms to aggregate and analyse electricity consumption data.

It is important for these customers to appoint a Metering Coordinator and issue instructions to maintain the direct metering agreement arrangement. Many metering service providers are currently seeking registration with AEMO to perform the Metering Coordinator role and may have already contacted clients seeking nomination as a Metering Coordinator.

What happens if a large market customer does not appoint a Metering Coordinator?

If an electricity retailer has not been advised of your choice of appointed Metering Coordinator, or a Metering Co-ordinator arrangement is terminated, the responsibility will transfer to the electricity retailer responsible for the customer load.  The retailer will be able to choose the Metering Coordinator, subject to any relevant terms and conditions in the retail contract with the customer.  Some retailers are amending their standard term and conditions to provide clarity should this situation arise.

You can contact our energy market advisory team to get more information about the selection of a Metering Coordinator and the implication when negotiating a new retail services agreement.

What is the impact of this new arrangement for small consumers?

The option for small consumers to engage their own Metering Coordinators is not included in the Power of Choice arrangements. However, in many jurisdictions the provision of metering services for small customers has been opened to competition from 1 December 2017. In the effected jurisdictions under the new rules, energy retailers will be responsible for installing any new and replacement meters. For residential and small business customers any new or replacement meter will be a smart meter (also known as digital or advanced meters). The Local Network Service Provider will continue to provide reading, testing and maintenance services for meters that have not been installed under the Power of Choice rule change.

Some retailers are already changing customers over to smart meters, so they can provide a net metering solution for former solar bonus scheme customers.