The Australian Energy Regulator today issued its final determination on the Victorian distribution network service providers' Advanced Metering Infrastructure (AMI) budgets for 2009 to 2011 and metering charges for 2010 and 2011.
The five Victorian distributors which will install and own the meters—CitiPower, Jemena, Powercor, SP AusNet and United Energy Distribution—are required by the Victorian Government to rollout AMI (sometimes referred to as smart meters) by 31 December 2013 to all residential and small business customers.
The AER assessed the distributors' expenditure and metering charges applications under a cost pass-through arrangement established by the Victorian Government. The AER's final determination has taken account of public submissions, including revised proposals by the distributors' to its draft determination made in July, which led to the AER revising its position and clarifying certain aspects of its AMI determination.
AER Chairman, Steve Edwell, said this final determination provides the means for the distributors to meet their obligations in accordance with the Victorian Government's mandate.
The AER's determination approves $1.08 billion in expenditure budgets for 2009 to 2011, compared to the $1.2 billion proposed by the businesses, and also sets metering charges for 2010 and 2011. The determination results in the following charge for customers with a single phase single element meter in 2010:
- CitiPower – $104.79
- Jemena – $134.63
- Powercor – $96.67
- SP AusNet – $86.10
- United Energy Distribution – $69.21
On average, customers will pay $67.97 more in 2010 for metering services than in 2009, with a further increase of $8.42 in 2011. Differences between DNSPs' metering charges are due to choice of communications technology, network characteristics and cost allocation.
Approved charges have increased from the AER's draft determination. This is in part due to the AER's reconsideration of the distributors' return on capital and additional supporting evidence provided by distributors on costs already incurred for the rollout.
The Victorian Government expects a number of benefits from smart meters, including more cost reflective tariff structures that can help reduce peak demand and operational cost reductions by distributors.
The AER notes that the AMI rollout represents a significant investment for the Victorian distribution industry and electricity consumers.
"The AER will be mindful of expected future cost savings resulting from the smart meter rollout, and other positive impacts on network service delivery. The AER will be vigilant in ensuring that the savings are passed back to customers via lower future electricity tariffs," Mr Edwell said.
The final determination will be available on the AER website.