Clendon David: Smart Meters (Consumer Choice) Bill — First Reading 
Clendon David: Smart Meters (Consumer Choice) Bill — First Reading 
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DAVID CLENDON (Green) 
: 
 I move  
That the Smart Meters (Consumer Choice) Bill be now read a first time. 
 At the appropriate time I intend to move that the bill be considered by the Commerce Committee. The genesis of this bill is in part a response to a report published in June last year by the Parliamentary Commissioner for the Environment Dr Jan Wright entitled  
Smart electricity meters: How households and the environment can benefit 
. This bill would give effect to the recommendations of the commissioner. It would do that by ensuring that all meters have functionality enabling them to automatically control loads and talk to smart appliances and by requiring installers to give consumers the choice to have real-time information about their electricity use and variable tariffs so that they can make use of that function if they wish to. The bill would also ensure that a variety of tariffs is available to consumers. 
It is known that new meters are currently being installed in households as part of a replacement programme for very old equipment. The meters being installed through that programme are being described as smart. Although those meters are indeed capable of adding value by providing services useful to power companies they are not capable of delivering much of anything to consumers. This bill seeks to remedy that imbalance by ensuring that meters that are installed are genuinely smart and will provide choices and benefits to consumers as well as to the providers of electricity. 
The much less smart meters being rolled out now allow power companies to use them for remote meter reading. They avoid the need for meter readers to go into homes. That cuts costs for the companies but that saving may or may not be passed on to consumers. The meters also allow companies to data mine about the consumer’s user profile and consumption patterns and enable remote disconnection or reconnection of supply. Although those are useful benefits for the providers the same meters—the same hardware in effect—could be installed quite simply and cheaply with the capability to enable consumers to manage their power load to minimise cost on a differential or cost-reflective tariff. As well as saving households money which is one of the core features and intentions of this bill that would benefit the nation by making better use of installed energy-generating capacity by delaying the need for extra generation and by reducing carbon dioxide emissions from coal and gas stations because they would be required to run less often. The key difference between what is currently being rolled out and what we would like to see rolled out is the addition of a home area network capability enabling the functions that can deliver sustained demand reduction and reduce cost to the consumers through load shedding and load shifting. The cost of ensuring that meters have this capability when they are installed is very low. To retrofit them later as has been proposed by some would be much much more expensive. 
The Electricity Commission was charged with investigating whether the roll-out of advanced metering infrastructure—effectively smart meters—should be regulated and it came back with a recommendation that “it is not necessary to extensively regulate the roll-out …” of those meters as “the benefits of regulation do not outweigh the costs.” We have no quarrel with that part of the commission’s findings to the extent that the regulation proposed in this bill is deliberately very light-handed doing only enough to secure the necessary degree of standardisation and to ensure consumers are offered the opportunity to exploit the benefits of the technology. The Parliamentary Commissioner for the Environment in a briefing note signed by the heads of a number of consumer-owned and council-owned lines—or distribution—companies advocated for a somewhat more stringent approach to regulation. The companies saw the installation of smart meters as a significant building block towards a smart grid which is already an objective in Australia in many European countries and in parts of the US. 
The Electricity Commission notes that one of the primary drivers of smart meter installation nationally is to enable load management in particular allowing peak loads to be manipulated and levelled thus reducing the pressure on that critical peak-load capacity. The commission’s report notes also that “New Zealand has had an effective centralised load management system (the ripple control system) in place since the 1950s.” but goes on to concede that “the ability to enable more controllable load does make AMI systems attractive.”—considerably more attractive than the very old technology. The ripple control system we have is a very blunt instrument a one-trick pony and the new technology would allow for a much more comprehensive array of load management options. 
Clause 4 of the bill states: “The purpose of this Act is to empower domestic consumers to better manage their electricity use by requiring providers of smart meters to inform the domestic consumers of their options when upgrading to smart meters and setting minimum requirements for the provision of smart meters.” It is important to note that nothing in this bill obliges any consumer to adopt any of the new options. There is absolutely no obligation on consumers to accept or take on any extra cost; they simply must be given a choice. The cost to the company of offering that information at the time of installation would be negligible. 
One of the options a company would be required to offer to a customer is an in-home display—effectively a small screen inside the home that displays in real time the current tariff in cents per kilowatt the current rate of consumption and the current use for the day in consumed dollars and in kilowatt hours. It is a very simple read-out that can sit conveniently in the home. We know from experience that where these have been trialled in business premises and domestic situations such a real-time display works as a constant reminder to consumers of their consumption and is a prompt for them to turn off unnecessary non-essential consumption at that moment. The units are a really effective mechanism for initiating and embedding long-term behaviour changes in energy use and conservation. That will benefit the individual consumer and again will reduce demand particularly for peak generation. 
The bill requires retailers to offer to consumers the choice of a cost-reflective tariff an average-price tariff or a low fixed-charge tariff. Those who are currently on the low fixed-charge tariff will be able to stay on that tariff if that is their preference. It is entirely in a consumer’s hands. The cost-reflective tariff is a tariff where the customer pays a different rate according to the time of the day the units are consumed. Those types of tariffs can be designed to closely signal the network cost—the generation cost—of the electricity being consumed at any given time. The average-price tariff is simply a tariff where the consumer pays the same fixed rate for each unit of electricity consumed reflecting the average cost of generation across the 24-hour period. The low fixed-charge tariff is an average price offered to people who consume low amounts of electricity as defined in the regulations. That spread of options will allow householders to select the model that best provides for their needs whether they have large households with a relatively high demand—as with growing young families perhaps—or small low-user households such as with older couples who have lower needs and a lower demand for electricity. 
All we are seeking to do with this bill is to combine available well-proven technology with some options being offered to consumers to enable them to make intelligent choices and so reduce their costs. The bill is appropriately titled a consumer choice bill. It suggests we use the readily available technology. In that way we can reduce the need for add-in generation with all the social environmental and financial costs inevitably associated with that. I commend this bill to the House.