Opportunities to maximise smart benefits exist

Victorian consumers are paying a “substantially increased” net cost for the smart metering program, while most smart meters benefits have yet to be realised, according to a report released by the auditor general.

By the end of the year, Victoria’s electricity consumers will have paid an estimated $790 per household for metering services, including the rollout and connection of smart meters, since 2009, according to the report. This includes costs associated with installing and maintaining smart meters and related infrastructure and systems – fees applied to electricity bills but not itemised.

Despite departmental action to influence the Australian Energy Regulator’s (AER) scrutiny of metering costs, the reported said total metering charges imposed on consumers between 2009 and 2015 have been approximately $285.7 million or 11.4 per cent, more than the distributors’ original forecasts. Costs are forecast to reduce from 2013 to 2023, but will reportedly increase again sharply from 2024 if the meters are replaced from that time as anticipated by the 2011 CBA.

“Worryingly, the Department of Economic Development, Jobs, Transport and Resources does not have a good understanding of the cost of the program, which it does not track,” former Victorian auditor-general John Doyle said to the state parliament.

“I do not agree with the department’s views it should not report publicly on costs and its assertion it would have to take on the role of the regulator or replicate its work. Nor do I accept the department’s assertion the costs incurred to date do not warrant monitoring and reporting as these are ‘sunk’, noting instead only benefits tracking is what is important.

“Of course benefits tracking is crucial, but the success or otherwise of the smart meters program cannot be properly scrutinised without an understanding of the costs of achieving the benefits. Further, none of the arguments raised by the department absolve it from providing full transparency to consumers and government.”

The report makes a series of recommendations including to track and report on costs, improve consumer education and facilitate benefits pass-through, which if addressed, Mr Doyle said will maximise the benefits
to consumers.