Victoria's smart metering program

The move to AMI is driven by several different factors, which may be expressed in different ways by each of the many stakeholders.

One of the most fundamental drivers is the desire for better management of electricity distribution infrastructure so that current investments can be made to last significantly longer, allowing new expenditure to be spread out. The cost of distribution infrastructure is dictated by its peak load carrying capacity. At present, peak consumption in the state is triggered on only a few days annually when extreme heat leads to high demand for air conditioning; otherwise the bulk of the distribution system operates at significantly beneath its peak capacity. This means that if the rare peak loads can be spread out, the current system on average will be able to meet medium term future demands without significant enhancement, thus reducing or delaying additional network costs.

Smart metering is key to better management of peak power consumption. It allows more effective flexible pricing, including sophisticated time-of-use (TOU) tariffs, with real time price signals able to be relayed to consumers in a variety of ways. Smart metering also provides greatly enhanced data for DBs to monitor their networks, manage instantaneous distribution, and plan for the future. It will allow direct load control of power hungry appliances such as air conditioners, in-floor heating and swimming pool pumps, so that in times of crisis, electricity companies can ration supply to such appliances items, without noticeably affecting their amenity. Meter Data Services will in future let power consumption and efficiency data to be relayed to consumers to help them positively modify their power related behaviours.

Finally for the purposes of this brief recounting of AMI's drivers, we note that it is expected to deliver a further set of direct consumer benefits. It will lower the cost of meter reading, and eliminate estimated reads, thus providing consumers with more accurate electricity bills. And it allows remote disconnect/reconnect of power to premises, significantly improving customer service and cost when occupancy changes.

Project environment

The AMI project is not without controversy.2 The cost-benefit from the consumer perspective worries some, especially when charges for smart meters appear on electricity bills even before they are installed. In the wake of the accelerated rollout, some consumer groups have been left feeling that many of their concerns have not yet been addressed. Above all, relatively little information has been made available (for reasons we discuss later) and in this void, a great deal of supposition has been allowed to build up and propagate.

The environment has bred a remarkably wide spectrum of consumer concerns. It is unclear to many householders what smart meters are doing. Some feel that the flashing lights, being visible at a distance from the property may compromise home security by indicating when people are in and out. The electronic nature of smart metering is suspected by some of allowing potential surveillance of what householders are up to, and increasing their exposure to unwelcome direct marketing. And the possibility of sharing electricity consumption data with third parties brings additional privacy fears, especially given the unfortunate occasional excesses of various large Internet companies.

Victoria's AMI rollout is proceeding in parallel with the National Smart Meter Program (NSMP), with the expectation that Victoria will transition over time to national arrangements once they are sufficiently developed. AMI stakeholders are using their experience to actively contribute to NSMP deliberations on governance and technological issues, while attempting to safeguard their strategic and business interests by keeping the NSMP aligned with AMI's established features.

Smart metering provides a powerful platform for significant innovation in retail electricity products and services, and this has created major excitement in some circles.3 Some industry players would prefer that more experience with this new technology be garnered before regulating 'preemptively'. Lockstep notes that tension between privacy and innovation often arises in online businesses, and this is not always satisfactorily resolved. It is important to maintain a good faith dialogue amongst diverse stakeholders to head-off unhelpful perceptions that innovation and consumer protection are at odds.

2 See for example http://www.ceda.com.au/news-articles/2011/06/10/smart-metering-towards-an-efficientelectricity-future. Similar concerns have dogged smart meter programs overseas as well; see for example

3 See for example http://www.emeter.com/smart-grid-watch/2010/uk-smart-meter-prospectus-groundworkfor-energy-industry-innovation.

Project details

Bearing in mind that this PIA is concerned only with changes to information flows and thence privacy brought about by smart metering, here is a diagram of the major AMI components and a list of the important high level features of the program.

A diagram showing the electricity industry structure and relationships.
Figure 1: Electricity Industry Structure and Relationships Today4

Smart meters measure power consumption continuously, and records it every half-hour, to provide data needed for settling the national electricity market. The meters buffer the measurements and upload them periodically to the Distribution Business that controls the meter, for input to the market system. Uploads should occur at least once a day, in line with National Electricity Rules. To cope with network outages, the meters retain interval data over a much longer period (200 days).

Smart meters communicate interval data back to DBs over special secure private radio networks. Most use a "mesh radio" service provided by Silverspring; one uses the different technology of "wimax". In future some of these private network connections may be superseded by NBN.

4 Diagram courtesy of Stephen Thomson, Industry Structure and Relationships.ppt, 21 June 2011.

Smart meters feature a second type of wireless connectivity known as ZigBee, which is available for establishing optional Home Areas Networks (HANs). ZigBee is technically similar to the familiar "wifi" protocol which underpins all domestic wireless computer networks (but as we shall discuss later, crucially ZigBee is more secure by default than most commodity wifi devices).

The main intention of a HAN is to connect In-Home Displays (IHDs) and "smart" appliances directly to the meter for real time monitoring and control of electricity consumption. The ZigBee protocol is supported by an increasing range of "smart" appliances. There is very little experience of these devices as yet in Australia, and almost no consumer awareness.

Finally of note to this PIA, smart metering is intended to support a range of advanced services to assist consumers better manage their electricity consumption. These can be as simple as providing a secure personal webpage on which fine grained electricity statistics are displayed. Over time, more sophisticated services are anticipated. DPI has commissioned a preliminary survey of these; see [1]. There appears to be many ways for high resolution consumption data to be value-added to allow householders to monitor their power consumption, understand how it varies, and what they can do to better manage it.

Importantly, some of these advanced services will likely be provided by third parties who are not themselves registered market participants. In principle, third party services can obtain information by one of two routes:

  1. From the backend interval data collected by a DB or RB; this data will be aged by up to 24 hours but is more readily available through backend information systems rather than direct connection to the HAN.
  2. Direct from the meter via ZigBee; this data will be instantaneous, and available at a resolution of much less than 30 minutes, but it requires another device to be bound to the ZigBee network.

Third party meter data services occupy new ground in the electricity marketplace. Practical and attractive services are still in a state of flux; there appear to be no clear business models as yet. Significantly, Google recently withdrew its PowerMeter service.5 This may indicate difficulties for pure-play third party information services. Indeed, more than one RB told us they believe a 'conversation' about power consumption can only be meaningfully conducted with a consumer by their electricity retailer. The beneficial implication for privacy is that there is little prospect of an explosion of third party services, and the attendant privacy risks, while certainly potentially significant, will not be pressing concerns for the time being.

5 See An update on Google Health and Google PowerMeter 24 June 2011;
http://googleblog.blogspot.com/2011/06/update-on-google-health-and-google.html (accessed 22 July 2011).

Page last updated: 09/06/17