National Seniors Association 18 October 2010 Jo Benvenuti David Stanford

Transcription

1 National Seniors Association 18 October 2010 Jo Benvenuti David Stanford

2 About CUAC The National Energy Market what it means Victorian Issues Price Bushfire Royal Commission Victorian Gov Climate Change White Paper Smart Meter Rollout CUAC directions Choice and Marketing Engagement with CUAC

3 CUAC was set up in 2002 to: Represent all Victorian energy and water consumers in policy and regulatory processes Facilitate and undertake research on consumer utilities issues Monitor grassroots consumer utilities issues with particular regard for low-income, disadvantaged and rural consumers

4 Generation Generators produce electricity, feeding it into the National Electricity Grid Transmission Electricity transferred to distribution substations Distribution Low voltage electricity transferred from substations to end users Retail Retailers purchase generators' electricity and sell in competitive retail market Distribution companies SP Ausnet, Jemena, United Energy, Citipower & Powercor More than a dozen retailers, including AGL, Red Energy & TRUenergy Customer

5 Electricity charges Two types of contract usage/consumption charge plus service/fixed charge standing contract: a basic, no frills contract that is the default if one moves premises and hasn t negotiated a market contract market contract: a contract negotiated between customer and retailer. It may offer a better deal, be fixed-term or ongoing, and requires the customer s explicit informed consent

6 The National Energy Market is the electricity and gas supply system that covers all of Australia s eastern states. In electricity, it includes generators and the poles and wires needed to transport that electricity to consumers. In gas it includes the production facilities and the pipelines required for transportation.

7 In 2003,to facilitate a better functioning national market the MCE agreed a package of reforms to Australia's energy market: governance and institutions, economic regulation, electricity transmission, user participation and gas market development In Victoria, network regulation now transferred to AER. AER conducts price reviews to determine network tariffs 40% 50% of bill

8 Now in transition to new retail regulation from ESC to AER under new laws National Energy Customer Framework Timetable: SA and then all other states and territories except WA CUAC concerned that these new regulations diminish strong customer protections CUAC will continue to advocate for Victorian derogations Example: universal access to payment plans

9 Price: Victoria first state to move to retail price deregulation from 1 January 2009 Community concern about higher prices ESC report shows consumers can save if they get the right market contract CUAC position: consumers need more information, education and tools to assist choice - more later

10 The Australian energy regulator is currently undertaking the process of determining the prices Victorian consumers will pay for the electricity network (poles and wires) over the next 5 years. Despite business seeking significant price/revenue increases, the AER rejected these proposals in their draft decision. This would mean reduced electricity cost pressures on consumers. The final decision will be released on 31 October 2010

11 The VBRC recommended among other things that the State amend the Regulations under Victoria s Electricity Safety Act 1998 and otherwise take such steps as may be required to give effect to the following: the progressive replacement of all SWER (single-wire earth return) power lines in Victoria with aerial bundled cable, underground cabling or other technology that delivers greatly reduced bushfire risk. The replacement program should be completed in the areas of highest bushfire risk within 10 years and should continue in areas of lower bushfire risk as the lines reach the end of their engineering lives; and the progressive replacement of all 22-kilovolt distribution feeders with aerial bundled cable, underground cabling or other technology that delivers greatly reduced bushfire risk as the feeders reach the end of their engineering lives. Priority should be given to distribution feeders in the areas of highest bushfire risk.

12 Some estimates suggested that the implementation of this recommendation could cost as much as $20 billion. The Government decided to conduct further consultation on this issue to ensure a full assessment of the costs and benefits of such a bushfire risk mitigation option. It is very important that if substantial cost is to fall on Victorian consumers that it is effective at very substantially reducing the risk of catastrophic bushfires. It is also important to consider alternative options as well as equity impacts. CUAC is on a reference group established by Energy Safe Victoria to further examine these issues.

13 In July, the Victorian Government released it climate change policy position paper. It includes commitments to Reduce Victoria s greenhouse gas emission by 20 per cent in relation to 2000 levels by 2020 through a legislated target; Shut down ¼ of the Hazelwood power station; Introduce a feed in tariff for medium sized solar generators Increase the average energy efficiency rating of Victoria homes to a 5 star level This last commitment is broadly in line with the One Million Homes campaign led by Environment Victoria and supported by CUAC.

14 What do you already know about smart meters?

15 Measures electricity usage every half-hour Communicates usage information to the distributor Can be read remotely (or manually) via a telecommunications network Enables remote connection and disconnection Helps distributors to detect and locate outages and restore supply more quickly Helps distributors to monitor and manage power supply quality

16 Mandated by Victorian Government Roll-out includes installation of smart meters and development of related communications infrastructure Rollout began in 2009, continuing over four years to 2013

17 Estimated billing issues Connection and disconnection Data issues Remote control of a consumer s electricity supply

18 But it s worth remembering that: average increase to metering charge of $67.19 in 2010 and $76.39 in 2011 paid through electricity bills customers may begin paying charges before smart meter is installed this is an average figure costs will vary across different distribution areas while the charge is increasing due to smart meters, consumers also paid metering charges in the past consumers are paying for the infrastructure upgrade, not their individual meter

19 Weekdays Weekends An example of peak, shoulder and off-peak periods from New South Wales - EnergyAustralia s PowerSmart pricing

20 An in-home display Examples of programs that consumers may be able to use to make sense of consumption data Microsoft Hohm and Google powermeter

21 If... Appropriate consumer protections are in place We move towards smarter electricity networks Then: Consumers able to: - choose offers that match personal consumption patterns - understand energy consumption and identify opportunities for efficiencies Smart meters will be a necessary part of smart grids, which can be an important tool for driving energy efficiency

22 Regulatory gaps, including on data security and data access Equity issues with time-of-use pricing and its impact on vulnerable groups Need to reexamine the effectiveness of concessions Issues raised have included... Need for consumer information and education ahead of the roll-out

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24 Equity issues to be addressed during the moratorium: Ensuring best practice consumer protection framework is in place Consideration of necessary concessions arrangements Examination of options for time-of-use pricing arrangements, including a pricing trial Regular review of the impacts of new tariffs on families Investigation of consumer information needs

25 initial information about smart meters & associated changes information needs of community organisations members and/or clients Minister for Energy, the Hon. Peter Batchelor MP

26 The key findings of the smart meter project were: That consumers need more information on smart meters to better understand the implications and the cost; That this information should be delivered via mass media but also through targeted communication using non-government organisations. That education and information will be particularly important as the more advanced features of the meters are introduced. Functions such as the Home Area Network should be enabled to better allow consumers take advantage of the benefits.

27 Smart meter policy/equity issues Research projects: Smart meter information Choice Marketing Contact:

28 Questions Feedback