National Smart Metering Program Memorandum Smart Metering Program File Name: Memo 20090901 v1.0.docx Security Classification: Unrestricted National Smart Metering Program Memorandum

National Smart Metering ProgramNational Smart Metering Program

File Name: Memo 20090901 v1.0.docx Security Classification: Unrestricted

National Smart Metering Program

Memorandum To: Interested Parties From: NSSC Secretariat Date: 2 September 2009 Dear All The purpose of this covering note is to advise interested parties of the National Smart Metering Program (NSMP) that the content contained within the following document does not contain the latest information of the NSMP deliverables and schedules.

As the NSMP program of work has evolved, reporting on deliverables (and any changes to the deliverables, as endorsed by the NSSC) has been reflected in individual status reports for the work streams.

Interested parties are referred to the status reports for the current list of NSMP deliverables and schedules.

Kind regards

NSSC Secretariat

[email protected]

National Smart Metering ProgramNational Smart Metering Program

National StakeholderSteering Committee

NSMP DeliverablesSpecification

Version number: Version 1.0

Status: Final

Author Harry Koller, Program Director

Date published 28 November 2008

File name NSMP_Specification ofdeliverables_v1.0.doc

Table of Contents

1 DOCUMENT CONTROL .......................................................................................................................... 3

1.1 VERSION CONTROL ............................................................................................................................... 31.2 APPROVAL ............................................................................................................................................ 3

2 INTRODUCTION ....................................................................................................................................... 4

2.1 BACKGROUND....................................................................................................................................... 42.2 PURPOSE OF DOCUMENT........................................................................................................................ 4

3 SMART METERING INFRASTRUCTURE SCHEMATIC .................................................................. 5

4 IDENTIFICATION OF DELIVERABLES............................................................................................... 7

5 BUSINESS REQUIREMENTS WORK STREAM .................................................................................. 8

6 BUSINESS PROCESSES AND PROCEDURES WORK STREAM.................................................... 13

7 PILOTS AND TRIALS WORK STREAM ............................................................................................. 15

8 REGULATION WORK STREAM .......................................................................................................... 16

9 RECOMMENDATION............................................................................................................................. 18

APPENDIX A GLOSSARY ....................................................................................................................... 19

APPENDIX B MCE OUTPUTS AND RELATED WORKSTREAMS ................................................. 21

NSSC- National Smart Metering ProgramNSMP Deliverables Specification

File Name: NSMP_Specification of deliverables_v1.0.doc Page 3 of 22

Security Classification

1 Document Control

1.1 Version Control

Version Date Description Amended by:

0.1 23/10/2008 Initial Draft for NSSC Review andApproval by H. Martinson

H. Martinson

0.2 27/10/2008 Amended draft for NSSC review andapproval by H. Koller

H. Koller

0.3 12/11/2008 Amended draft in response to feedbackfrom NSSC members

Change document name

Remove diagram

Remove all examples of functionalrequirements

Move recommended NEM proceduresfrom Regulation to the Business Processand Procedures work stream.

Incorporate NSMP Work Plan deliverablenames into this document to haveconsistency with the NSMP Schedule.

H. Koller

0.4 26/11/08 Revise for NSSC comments and changesmade to ensure consistency with theWorking Group terms of reference

Revise for NSSC feedback received byCOB 25/10/2008

H. Koller

1.0 28/11/08 Baselined post approval by NSSC H. Martinson

1.2 Approval

Authorised by Signature Date

NSSC

Program Director

28/11/2008

MCE




2 Introduction

2.1 Background

The Ministerial Council on Energy (MCE) has endorsed the rollout of smart metering, where the

benefits outweigh the costs, in order to enable consumers to make more informed choices and

better manage their energy use and greenhouse gas emissions, reduce demand for peak power

with potential infrastructure savings, and drive efficiency and innovation in electricity business

operations and retail market competition.

The National Stakeholder Steering Committee (NSSC) has been established by the MCE to

establish a national framework for the rollout of smart metering infrastructure (SMI) including

technical and operational requirements and changes to regulatory rules and procedures in the

National Electricity Market, Western Australia and Northern Territory.

The NSSC is to have a timeline for the completion of this work agreed with the Ministerial

Council on Energy (MCE) by the end of December 2008.

The NSSC is to prepare a National Smart Metering Program (NSMP) Work Plan that will specify

the tasks and deliverables required to specify the smart metering infrastructure functional

specification and supporting regulatory framework. The NSMP Work Plan will include the

following documents:

a) NSMP Work Plan Executive Summary – provides a summary of the NSMP Work Plan

covering work streams, major deliverables and deliverable milestones

b) NSMP Deliverables Specification- description of the deliverables required under the

NSSC terms of reference

c) NSMP Roadmap - High level roadmap covering the period 2008 – 2012 which highlights

key milestones, dependencies both external and internal to the program, and swim lanes

used to denote the key program activities

d) NSMP Schedule – A detailed schedule of tasks and deliverables by work stream for the

period January 2009 to September 2009 (i.e. Gantt Chart and Word Table). The NSMP

Schedule will be maintained on a rolling 6 monthly basis (Note: NSMP Schedule will be a

roll-up of the detailed schedules maintained for the various work streams)

e) NSMP brief - documents the key inputs (e.g. previous MCE decisions, NERA Cost

Benefit study, NSSC terms of reference) to the NSMP and the expected outcomes (e.g.

Regulatory Impact Study) of the rollout of smart meters.

f) Program Management Plan - Program Management Plan (PMP) outlines how the

program will be managed, ensuring that all program/project management disciplines are

addressed

The NSMP Work Plan is scheduled to be approved by MCE at its meeting on 12 December

2008.

2.2 Purpose of document

The purpose of this paper is to provide the definition of deliverables for the National Smart

Metering Program which is consistent with the NSSC’s terms of reference. Appendix B maps the

NSSC terms of reference against this specification of deliverables.




The NSSC Secretariat has prepared this document drawing upon the information contained in

the following documents:

a) MCE Decision paper - A National Minimum Functionality for Smart Meters -13 December

2007

b) Smart Meter Decision paper – MCE 13 June 2008

c) MCE – Statement of Policy Principles – 13 June 2008

d) Standing Committee of Officials of the Ministerial Council on Energy Cost-Benefit

Analysis of Options for a National Smart Meter Roll-Out (Phase Two – Regional and

Detailed Analyses), Regulatory Impact Statement For Decision, June 2008

e) Cost Benefit Analysis of Smart Metering and Direct Load Control – Final Executive

Summary – 23 May 2008, NERA Economic Consulting

f) Technical and Regulatory Working Group – Work Plan for delivery of the NSSC Outputs

– Version 0.9 – 13 October 2008

g) Victoria Advanced Metering Infrastructure Program – Operating Model – Requirements

Version (V0-3)

h) Minimum AMI Functionality Specification (Victoria) September 2008 Release 1.1

i) Minimum AMI Service Levels Specification (Victoria) September 2008 Release 1.1

j) In-Home Display Functionality Guidelines (Victoria) – 8 June 2007 – Version 3.0

3 Smart metering infrastructure schematic

An example of a schematic for the smart metering infrastructure is shown in diagram 1. This

schematic is not meant to imply a particular metrology technology or system arrangements. The

schematic is a work in progress and the intent is to refine this schematic in the development of

the national smart metering infrastructure framework.

smart metermanagement

system

HANsmartmeter

smart metercommunication

networkCD#2

Distributorenvironment

B2B/MSATSnetwork

hard wire control

CD#1

CD consumer’s device

in-homedisplay

supplyswitch

NEMMCOenvironment

Retailerenvironment

consumerremote

connectionexisting elementsnew elements

CD#3

eg: water heater

eg: air conditioner




Diagram 1: Smart metering infrastructure schematic (Example)

The diagram shows the potential components of the smart metering infrastructure. The potential

components are described as follows:

a) Smart meter. This is the device at the heart of the infrastructure. The device would

function partly as an interval meter (to measure power flow into or out of the premise)

and partly as a simple housing for other control actions (for example: to turn a supply

switch ON or OFF, to turn a device circuit ON or OFF, and to pass through

communication signals to the HAN). The smart meter would have sufficient capacity and

speed to manage the transmission of signals to and from the smart meter management

system via the smart meter communication network (‘two-way traffic’). The smart meter

would have sufficient capacity and speed to manage the transmission of signals to

Consumer Devices via the Home Area Network.

b) Home Area Network (HAN). The HAN is represented partly by the consumer’s space

over which information is transmitted, partly by the transmission and reception

technology, partly by device identifier codes, and partly by the signal coding and

decoding rules that are applied to a signal that is to be transmitted over that space. The

space may include physical barriers such as doors, walls and windows. The space may

include all parts of a premise including inside and outside the dwelling. The space may

overlap with spaces of other consumers. Any pending interference arising from the

overlap would be controlled by the device identifier codes.

c) Consumer’s Device (CD). The Consumer’s Device is represented by any number of

physical devices that consume electricity (e.g. air-conditioning motor, swimming pool

pump, security light, stove/oven). In the diagram, these different devices are represented

by CD#1 (e.g. in-home display as described below), CD#2, etc. The ON/OFF operation of

some consumer devices could be controlled by signals transmitted over the HAN (e.g.

CD#2) or by hard wire switches within the smart meter (e.g. CD#3).

d) In-home Display (IHD). The IHD is represented by a special form of Consumer’s Device.

This device would be capable of flexible location within the consumer’s space, at a point

most convenient to the consumer. The device would receive signals (eg. retailer

messages to the consumer, such as changes in electricity price) from the smart meter

device over the HAN. The device need not be interactive. The information published on

the IHD must be able to be manually interpreted

e) Supply switch. The ‘supply switch’ is represented by a special purpose device that is

capable of turning ON and OFF the main circuit to the premise. This function would be

used by a distributor to disconnect and reconnect a consumer, if permitted under its

licence conditions and regulatory codes of practice.

f) Smart meter communication network (SMCN). The SMCN is represented partly by the

space or conductors (or a mixture of both) over which smart meter signals are

transmitted, partly by the transmission and reception technology for those signals, partly

by device identifier codes, and partly by the signal coding and decoding rules that are

applied to a signal that is to be transmitted over that space. The space will include the

electrical pathways that geographically connect a consumer’s premise to a central

database located at a remote location.

g) Smart meter management system (SMMS). The SMMS would have sufficient capacity

and processing power to manage two-way traffic with the smart meter. Similarly, the

SMMS would have the capacity and processing power to manage two-way traffic with




NEMMCO (e.g. meter reading data, NEM spot prices), two-way traffic with retailers (e.g.

IHD display information, disconnection status), and two-way traffic with the Distributor

(eg. metering data, supply status, disconnect and reconnect actions).

h) Consumer remote connection – The customer would have the ability to remotely

activate or adjust appliances in the home from outside the home.

i) Existing components of the infrastructure. The existing components of the smart

metering infrastructure are as shown on the right hand side of the diagram. Although the

components are largely in place, some upgrading of these components will be necessary

to accommodate the desired functionality of the smart metering infrastructure. These

components include the distributor’s environment, the retailers’ environment, the

NEMMCO environment.

Overall, the national SMI framework should provide for an efficient, flexible and open-access

smart metering infrastructure that supports interoperability, permits adoption of new

technologies, minimises barriers to competition and interconnects energy businesses to deliver

reliable, accurate and timely energy metering data in a manner that supports emerging network

and energy management solutions.

4 Identification of Deliverables

In summary, under its terms of reference, the NSSC is to:

a) develop with the MCE a consistent national regulatory framework for smart meters in the

National Electricity Market

b) develop the technical and operational requirements and agree them with the SCO

c) develop and recommend supporting changes to the NER and NEM procedures

d) reach agreement on a national regulatory framework for SMI taking into account the

steps already taken by Victorian businesses

e) coordinate pilots and refresh business cases, share results, and optimise learnings

f) advise the MCE on a specific HAN standard, appliance standards to include in the HAN

standard

g) advise on the level of network demand management that can be achieved through direct

load control

h) advise whether guidelines are needed to support retailer innovation and compete in the

provision on IHDs

i) advise on the materiality of the risk that insufficient interoperability between different

meters, communications infrastructures and metering management systems may

introduce further market power risks or reduce competition in metering

j) propose service standards for access to the HAN to optimise innovation and take up

k) consider WA and NT deployment timelines to maximise efficiency

l) advise on the National Energy Customer Framework and safety regulations if required by

SCO

Based on this, the NSSC deliverables should be developed based on four work streams with the

following major deliverables. These are:




a) Business Requirements Work Stream – Smart Metering Infrastructure Functional

Specification (e.g. defines business requirements, performance requirements and service

standards for the SMI)

b) Business Processes and Procedures Work Stream – NEM Smart Metering Infrastructure

Operating Model (e.g. identifies the procedures that require change to support SMI) with

modified processes/procedures for WA and NT. This work stream will also prepare, in

consultation with the relevant NEM reference groups, the recommended changes to NEM

Procedures for consideration by NEMMCO and enforceable procedures in the non-NEM

jurisdictions for consideration by the appropriate regulatory agency.

c) Regulation Work Stream - Regulatory requirements to modify existing regulatory

arrangements including changes to the National Electricity Rules (NER) and enforceable

regulations in the non-NEM jurisdictions to support the rollout of smart meters.

d) Pilots and Trials Work Stream - Pilots and Trials Work Stream – Co-ordinate pilots and

trials of business cases across businesses and jurisdictions. It is expected that the pilots

will reduce the range of uncertainty (particularly in jurisdictions with some risk of a net

loss at the lower end of the range of benefits) to inform whether a roll-out should proceed

and also inform the development of roll-out implementation plans to maximise benefits.

The NSSC Secretariat is recommending that four work streams is the preferred option in order to

ensure that the smart metering infrastructure is always addressed on an end to end basis. This

is consistent with stakeholder feedback provided to SCO in the Regulatory Impact Statement

(RIS)1. This will avoid “details slipping through the cracks” which might occur if the work streams

were organised around particular components of the infrastructure (i.e. Smart Meter or HAN).

Within a work stream, it may be appropriate to have a specialist sub-group to work with an SME

to define the more technical aspects of a particular infrastructure element. This sub-group would

report back to the main work stream group.

The specification of deliverables has been made around each of these streams of work. In

accordance with the RIS, the NSMP deliverables will only address stakeholders connected to

on-grid generation in the NEM, South Western Interconnected System (SWIS in Western

Australia), Darwin-Katherine networks (Northern Territory)2. The specification is scoped in

Sections 5, 6, 7 and 8 below, and together they form the ‘specification of deliverables’ to be used

in the NSMP Work Plan.

5 Business Requirements Work Stream

The objective of this work stream is to prepare recommendations on a Smart Metering

Infrastructure Functional Specification (“SMI Functional Specification”) that will provide electricity

businesses and consumers with the mechanisms that will enable them to potentially deliver the

expected outcomes of smart metering envisaged by the MCE and other stakeholders.

The Regulatory Impact Statement3 prepared by SCO sets out the expected outcomes of smart

metering:

1Standing Committee of Officials of the Ministerial Council on Energy Cost-Benefit Analysis of Options for

a National Smart Meter Roll-Out (Phase Two – Regional and Detailed Analyses), Regulatory ImpactStatement for Decision, June 2008, page 115.2

Op. cit., RIS, page 16.3

Standing Committee of Officials of the Ministerial Council on Energy Cost-Benefit Analysis of Options fora National Smart Meter Roll-Out (Phase Two – Regional and Detailed Analyses), Regulatory ImpactStatement for Decision, June 2008, page 32.




“Reducing demand for peak power, with consequential infrastructure savings (e.g.

network augmentation and generation)

Driving efficiency and innovation in electricity business operations, including improving

price signals for efficient investment and contracting

Promoting the long term interests of electricity consumers with regard to the price,

quality, security and reliability of electricity

Promoting competition in electricity retail markets

Enabling consumers (including residential, business, low- and high-volume users) to

make informed choices and better manage their energy use and greenhouse gas

emissions

Manage distributional price impacts for vulnerable consumers

Promoting energy efficiency and greenhouse benefits

Providing a potential platform for other demand side response measures and avoiding

discrimination against technologies, including alternative energy technologies”

These objectives take account of COAG commitments, MCE policy direction, the market

objectives and consultation with stakeholders. Not all of the above objectives may be relevant to

SMI and the NSSC has a role to play in mapping the expected outcomes (objectives) to the

enabling functions.

Once the mapping of SMI enabling functions is completed, the NSSC will specify the minimum

business requirements, minimum performance requirements and minimum service standards

for the smart metering infrastructure. The proposed definition of these terms is as follows:

a) Business requirement – describes the functionality required and any variables associated

with requests for the service together with the components of infrastructure that are

required to perform the requested service. For example – the smart meter is required to

support the “opening of the supply contactor, either remotely or locally”).

b) Performance requirement– describes the outcome required for the components of the

smart metering infrastructure but excludes upstream or downstream systems. For

example – performance level for remote reads of individual meters – “Action performed at

90% of meters within 30 minutes”.

c) Service standard – describes the quantity and time required to complete a “service

request”. For example, Routine Read- Remote – no less than 95% being actual data from

meters to be available by 6 am the following day”.

The SMI Functional Specification should contain the full set of business requirements,

performance requirements and service standards for each component which must be met in

order for that component to be classified as functionally adequate.

In developing the SMI Functional Specification, the NSSC will:

a) Develop and recommend technical specifications, performance requirements and

amendments to functions, based on a sound benefits case which meets the key criterion

of maximising net benefit across different stakeholder groups

b) Develop and recommend service standards, including analysis of cost implications

c) Consider any related decisions arising from Phase 2 of the cost-benefit assessment

(NERA report)




The work on the SMI Functional Specification will address the following matters raised in the

NSSC terms of reference:

a) Item (m) provide timely advice on detailed national minimum functionality for smart

meters to maximise benefits across all stakeholders - this includes functions referred by

MCE to a technical stakeholder group, to develop and advise on technical definitions,

performance and service level requirements and relevant National Electricity Rules. The

starting point for this analysis should be the Minimum National Meter Specification shown

in Table 1 below.




Table 1 National Smart Meter Minimum Specification

Source: Standing Committee of Officials of the Ministerial Council on Energy Cost-Benefit Analysis of Options for a

National Smart Meter Roll-Out (Phase Two – Regional and Detailed Analyses), Regulatory Impact Statement for

Decision, June 2008

b) In relation to the item (m) – National Smart Meter Minimum Functionality for Function 12

Remote connect/disconnect and Function 13 Supply Capacity Control the NSSC is to:

Advise on consumer protection arrangements for these functions when requested

by SCO as part of the MCE’s National Energy Customer Framework review.

Advise on safety regulations that might impact on the availability of these

functions when requested by SCO as part of the MCE’s Safety review.

c) Item (n) recommend to the MCE how direct load control capability can be integrated into

priority appliances - this analysis should be undertaken in conjunction with the existing

appliance energy standards work currently being conducted by both the Equipment

Energy Efficiency (E3) Committee of the National Framework for Energy Efficiency, and

Standards Australia

d) Item (p) advise the MCE on whether there is a need to provide guidelines to support

development of the in-home display market4

4The advice should specify the nature of the function to be included in the smart meter along with advice

on service standards to encourage the uptake of in-home services and whether there is a need to provideguidelines to support development of the in-home display market. Encouraging uptake may also involvesome sort of incentive structure built into prices. If so, then there may be a need for the Regulation Work




e) Item (q) propose to the MCE defined service standards for access to the HAN to optimise

innovation and uptake of in-home services

f) Item (r) advise the MCE on the whether insufficient interoperability between different

meters, communications infrastructures and metering management systems may

introduce further market power risks or reduce competition in metering - in particular:

(i) the materiality of this risk

(ii) international progress on communications standards and practices to support

interoperability

(iii) the most appropriate framework to manage this risk in the Australian market

The NSSC understands that the definition of the business requirements, performance

requirements and service standards should be viewed as an iterative process within this work

stream whereby the business requirements should be defined first and followed by the

performance requirements and service standards. Once the performance requirements and

services standards are defined it may be necessary to revisit the business requirements until all

three definitions have been reconciled (in terms of trade offs of technical feasibility, costs and

benefits) and are consistent.

Indicative estimates of the costs and benefits for the SMI component in the SMI Functional

Specification will also be prepared. These indicative estimates will use as its starting point (e.g.

base line) the Phase 2 CBA study managed by NERA Economic Consulting5. Where better data

is available, it may be possible to update the Phase 2 CBA estimates. However the scope of the

work is to prepare indicative estimates only. The real work on developing the business case for

the SMI costs and benefits is to be performed on a voluntary basis by those companies electing

to prepare a detailed business case in each jurisdiction.

The final SMI Functional Specification will include recommendations on the following matters:

a) SMI Strategic Objectives: Mapping the MCE and other stakeholders’ SMI objectives to

the SMI enabling functions so as to confirm the required SMI minimum functions (e.g.

identify the mechanisms that will be required to deliver the SMI objectives)

b) SMI Components: Identify and confirm the SMI components to be included in the SMI

Functional Specification.

c) SMI Requirements: Specify the business, performance, and service level requirements

for the SMI components

d) Cost benefits analysis: Indicative cost and benefits using the Phase 2 CBA study

managed by NERA Consulting as an initial baseline.

e) Policy Advice:

Function 12 Remote connect/disconnect and Function 13 Supply Capacity

Control:

Stream to consider this in determining the pass through of the roll out costs so it can be built intodistributor tariffs.5

It is intended that CBA be an iterative process where the BRWG may at a later stage be asked revisit theSMI Functional Specification based on the outcomes of pilots and trials conducted by companies in eachjurisdiction or the implementation experience of the Victorian energy companies in their AMI rollout whichcommences in mid 2009.




i. Advice on consumer protection arrangements for these functions when

requested by SCO as part of the MCE’s National Energy Customer

Framework review.

ii. Advice on safety regulations that might impact on the availability of these

functions when requested by SCO as part of the MCE’s Safety review.

Item (p) advise the MCE on whether there is a need to provide guidelines to

support development of the in-home display market

Item (q) propose to the MCE defined service standards for access to the HAN to

optimise innovation and uptake of in-home services

Item (r) advise the MCE on the whether insufficient interoperability between

different meters, communications infrastructures and metering management

systems may introduce further market power risks or reduce competition in

metering

6 Business Processes and Procedures Work Stream

The objectives of this work stream are to:

a) define the business processes and procedures in a NEM Smart Metering Infrastructure

Operating Model (NEM SMI Operating Model) required to deliver the SMI Functional

Specification. The NEM SMI Operating Model will define the cross industry processes,

interfaces and data flows that are needed to meet the smart metering infrastructure

requirements.

b) recommend the revised NEM procedures to support the delivery of the NEM SMI

Operating Model and enforceable procedures in the non-NEM jurisdictions.

The NEM SMI Operating Model should be developed in two levels with the Level 1 being

developed and approved by the NSSC before work commences on Level 26.

a) Level 1 Summary Process – a high level overview of the process defining the sub-

process

b) Level 2 Sub-Process – a detailed sub-process schematic identifying:

Inputs and outputs

Activities with roles and responsibilities defined for local network service

providers, retailers, retailers (FRMP), Responsible Persons, end use customers,

and NEMMCO

Business requirements (from the Business Requirements Work Stream)

Proposed changes to Enforceable Instruments – changes to the NER, MSATS

Procedures including Metrology Procedures or B2B Procedures

In developing the NEM SMI Operating Model, the NSSC may need to provide advice on the

changes to NEM Procedures required to address the following matters:

6Note: Some work may be required on Level 2 processes to correctly specify the Level 1 processes but

this will be minimised in order to get a NSSC endorsement of the Level 1 model.




a) Advice on consumer protection arrangements for the remote connect/disconnect and

supply capacity control functions when requested by SCO as part of the MCE’s National

Energy Customer Framework review.

b) Advice on safety regulations that might impact on the availability of the remote

connect/disconnect and supply capacity control functions when requested by SCO as

part of the MCE’s Safety review.

c) Advice on access to and protection of Smart Meter data, in conjunction with the MCE’s

Consumer Protection and Safety Review.

After the NEM SMI Operating Model is developed based on the assumption of a distributor led

rollout7 it may be necessary to modify the model to cater for any unique requirements for

Western Australia and Northern Territory. It would also be necessary to modify the model at a

later stage to adjust for any changes to the “Responsible Person” following the end of the

mandate period for distributors in the NEM.

Following the completion of the NEM SMI Operating Model this work stream will prepare

recommended changes to the NEM Procedures. Some key NEM Procedures that are likely to

require changes are highlighted below.

a) Recommend changes to the supporting MSATS Procedures, including

Prepare a submission of the changes to NEMMCO and the advisory Retail Market

Executive Committee (RMEC) for their consideration and subsequent incorporation

in the relevant documents, subject to any related AEMC Rule changes proposal.

NEMMCO will process the changes in accordance with change procedures in the

NER.

b) Recommend changes to the supporting NEM Metrology Procedures.

Prepare a submission of the changes to NEMMCO and the Metrology Reference

Group for their consideration and subsequent incorporation in the relevant

documents, subject to any related AEMC Rule changes proposal.

NEMMCO will process the changes in accordance with change procedures in the

NER.

c) Recommend changes to the supporting B2B procedures taking into account the B2B

Objective and B2B Principles.

Prepare a submission of the changes to the Information Exchange Committee (IEC)

for their consideration and subsequent incorporation in the relevant documents,

subject to any related AEMC Rule changes proposal.

The IEC will process the changes in accordance with the change procedures in the

NER.

It should be noted that according to the RIS, there will be a need for NEMMCO to administer two

sets of MSATS and B2B procedures with staged or partial rollout of the smart metering

infrastructure:

“The main implications of not rolling out smart metering across the NEM are:

7In the NEM SMI Operating Model, the needs of SA and other jurisdictions without a distributor led

mandate the rollout of smart meters by retailers will need to be addressed.




There will still be a requirement to settle the wholesale market on the basis of net

system load profiles, rather than actual information; and

Retailers operating across jurisdictions may require different business processes for

managing customer switching and services provided through smart metering, such

as special reads. This is likely to increase the costs associated with managing a

smart metering roll-out.

However, the cost-benefit analysis found that the economies of scale of smart meter

deployment mean that the cost of meters for those jurisdictions rolling out meters would not

be adversely impacted if some jurisdictions chose not to roll out.”8

7 Pilots and Trials Work Stream

The objectives of the Pilots and Trials Work Stream are to:

a) assess the pilots and trials work already undertaken and identify:

key findings that should be taken into account in the development of the SMI

Functional Specification and SMI NEM Operating Model (and proposed changes to

NEM Procedures)

gaps which may need to be addressed in future pilots or trials

b) coordinate pilots and trials, share results, optimise learning and assess if all aspects of

Smart Meters and associated systems, and their impact on network and market operation

and customer responses are tested

As noted in the RIS, it is important for the NSSC to co-ordinate pilots of business cases across

businesses and jurisdictions. It is expected that the pilots will “reduce the range of uncertainty

(particularly in jurisdictions with some risk of a net loss at the lower end of the range of benefits)

to inform whether a roll-out should proceed and also inform the development of roll-out

implementation plans to maximise benefits.”9

In this context, the definitions of ‘pilot’ and ‘trial’ are as follows:

a) A ‘pilot’ means the testing of the integrated smart meter infrastructure on an end to end

basis across nominated classes of consumers on a temporary basis. The length of a pilot

would be agreed on a case by case basis depending on the scope of the pilot.

b) A ‘trial’ means the testing of one or more components of the smart meter infrastructure

to gauge its performance under specified conditions. A trial would specify which

components of the infrastructure were to be tested and the reasons for the test. The

length of a trial would be agreed on a case by case basis.

The deliverables for the pilots and trials work stream should be as follows:

a) For completed, current, and future pilots and trials, the NSSC will prepare status reports

that include a list of matters that would (directly or potentially) adversely affect the

national minimum smart meter functionality or the smart meter infrastructure business

requirements and the business cases. The proposed reporting schedule is as follows:

The first Existing Pilots/Trials Status report will be prepared for the period ending

December 2008 and will cover past and current trials.

8Op. cit. RIS, page 99.





The matters arising from the Pilot/Trials 2008 Status Report will be provided to

the Business Requirements Work Stream to assist them in the development of

the SMI Functional Specification.

The second Pilots/Trials Status report will cover the period January to June 2009.

Thereafter MCE is to be provided with a Pilots/Trials Progress Report on June

2010, June 2011, and June 2012.

b) Pilots/Trials Scenarios Working Paper (prepared in 2009)

For new pilots, the NSSC will publish a list of preferred configurations of

technology across all elements of the smart meter infrastructure that would be

desirable to be included in a pilot

i. For example, in a pilot test the NSSC may prefer that the smart meter

infrastructure be configured against nominated functions of the smart

meter (disconnect and reconnect, say), nominated consumer devices (air-

conditioner, say), a particular type of communication technology, and

tested against specified classes of consumers (multiple story residence,

say).

For new trials, the NSSC will publish a list of preferred technical matters that

would be desirable to test in a trial.

i. For example, the testing of a smart meter with distributor line carrier could

be the subject of a suitably constructed trial.

ii. Some examples of other matters that may be tested are:

1. Identify how to improve participation rates in the Direct Load

Control program (using the Smart Meter functionality) and to

encourage the use of IHDs to lower household energy

consumption10

2. “Performance of technologies, interoperability of technologies,

direct load control through smart meters, consumer response and

impacts on different classes of consumers, and business

operational benefits”11

3. Item (o)- advise the MCE on whether direct load control should be

further tested and explored through the Smart Meter pilots to

identify mechanisms to maximise the benefits and to consider the

level of network demand management that can be achieved.

(NSSC terms of reference)

8 Regulation Work Stream

As a result of the business, performance and service level requirements specified for the smart

metering infrastructure and the business processes and procedures specified in the NEM SMI

Operating Model, changes will need to be made to the National Electricity Rules (NER) and

enforceable regulations in the non-NEM jurisdictions to support the rollout of smart meters.






It is also noted that specifications of changes to jurisdictional instruments are outside the scope

of the NSSC deliverables as noted below. However, the NSSC is encouraged to identify where

jurisdictional instruments may need changes.

The NSSC deliverables from this work stream are as follows:

a) SMI Regulatory Architecture paper – this deliverable will provide advice to the MCE on

the architecture of the national regulatory framework for the NSMP. This advice will

recommend to SCO on the regulatory matters to be addressed in the NER (e.g.

roles/responsibilities) versus the NEM Procedures (e.g. meter performance standards)

b) SMI NER Chapter 7 Review paper – this deliverable will provide advice to MCE on a

recommended set of rule or regulation changes with the NEM Objective that need to be

incorporated in regulatory instruments as a result of the smart metering infrastructure

business, performance and service level requirements. Some key regulatory issues to be

addressed may include:

Need for changes to the NER to support SMI (e.g. metrology role/responsibilities,

meter type, etc.)

Advice on consumer protection arrangements for the remote connect/disconnect

and supply capacity control functions when requested by SCO as part of the

MCE’s National Energy Customer Framework review. (Note: This would only

relate to changes to the NER and not NEM Procedures which will be addressed

by the Business Processes and Procedures Work Stream.)

Advice on safety regulations that might impact on the availability of the remote

connect/disconnect and supply capacity control functions when requested by

SCO as part of the MCE’s Safety review. (Note: This would only relate to changes

to the safety regulations and not NEM Procedures which will be addressed by the

Business Processes and Procedures Work Stream.)

Advice on access to and protection of Smart Meter data, in conjunction with the

MCE’s Consumer Protection and Safety Review. (Note: This would only relate to

changes to the NER and not NEM Procedures which will be addressed by the

Business Processes and Procedures Work Stream.)

Advice on any regulatory barriers to the use of direct load control by distribution

network businesses12

“SCO acknowledges that the bundling of meter charges and network charges

may present a barrier to retailers installing smart meters because they are

effectively paying for two meters (the distributors Type 6 meter and the smart

meter). Unbundling currently occurs in Victoria, ACT and Tasmania. SCO may

consider this matter further after seeking advice from the National Stakeholder

Steering Committee (NSSC).”13

“SCO recommends that current metering arrangements in the NEM for customers

with special requirements (e.g. unique PV installations) and the large industry

sector remain contestable. This allows meter providers currently operating in this

market to continue providing this service and build upon their existing expertise.

This approach encourages further innovation and technology development in this






sector which could be transferable to the residential and small customer sector if

it becomes contestable following the roll-out period.

This approach also provides for needs of customers with 'special metering

requirements' by offering them choice of provider. A definition of 'special metering

requirements' should be included in the Rules to provide clear delineation where

metering is the exclusive responsibility of distributors or is contestable.”14

c) SMI Cost Recovery Paper – in response to the proposed SCO approach to SMI Cost

recovery, a SMI Cost Recovery Paper will be prepared that provides a response to SCO

on the principles for cost recovery in relation to:

Pilots and trials

Cost recovery for the implementation of the Smart Metering Infrastructure

9 Recommendation

It is recommended that the NSSC adopt the specification of deliverables, as detailed in

Sections 5 to 8 of this paper, as a contribution to the NSMP Work Plan that is to be

presented for approval to the MCE in December 2008. In summary the work streams and

major deliverables are:

d) Business Requirements Work Stream – Smart Metering Infrastructure Functional

Specification (e.g. defines business requirements, performance requirements and service

standards for the SMI)

e) Business Processes and Procedures Work Stream – NEM Smart Metering Infrastructure

Operating Model (e.g. identifies the procedures that require change to support SMI) with

modified processes/procedures for WA and NT. This work stream will also prepare, ,in

consultation with the relevant NEM reference groups, the recommended changes to

NEM Procedures for consideration by NEMMCO and enforceable procedures in the non-

NEM jurisdictions for consideration by the appropriate regulatory agency.

f) Regulation Work Stream - Regulatory requirements to modify existing regulatory

arrangements including changes to the National Electricity Rules (NER) and enforceable

regulations in the non-NEM jurisdictions to support the rollout of smart meters.

g) Pilots and Trials Work Stream - Pilots and Trials Work Stream – Co-ordinate pilots and

trials of business cases across businesses and jurisdictions. It is expected that the pilots

will reduce the range of uncertainty (particularly in jurisdictions with some risk of a net

loss at the lower end of the range of benefits) to inform whether a roll-out should proceed

and also inform the development of roll-out implementation plans to maximise benefits.

14Op. cit. RIS, pages 90-91.




Appendix A Glossary

The following acronyms are in the NSSC Glossary.

AEMC Australian Energy Market Commission

AER Australian Energy Regulator

AMI Advanced Metering Infrastructure

AS Australian Standard

B2B Business to Business

BPRG B2B Procedures Reference Group (as established under the IEC)

BRDRG AMI Business Requirements Definition Reference Group

CATS Consumer Administration and Transfer Solution

COAG Council of Australian Governments

DNSP Distribution Network Service Provider

EEEC Equipment Energy Efficiency (E3) Committee

ENA Energy Networks Association

ERAA Energy Retailers Association of Australia

FRC Full Retail Competition

FRMP Financially Responsible Market Participant

HAN Home Area Network

IEC Information Exchange Committee (as established under section 7.2A.2 of the Rules)

IHD In-home Display

LNSP Local Network Service Provider

MCE Ministerial Council on Energy (established under the COAG)

MRG Metrology Reference Group (established under the RMEC)

MSATS Market Settlement and Transfer Solution

MTWG Metering Technology Working Group

NCRE National Consumer Roundtable on Energy

NEL National Electricity Law

NEM National Electricity Market which excludes Western Australia and Northern Territory

NEMMCO National Electricity Market Management Company

NEO National Electricity Objective (as set out in section 7 of the NEL)

NER National Electricity Rules

NSMP National Smart Metering Program

NSSC National Stakeholder Steering Committee (RET Smart Metering program)

NT Northern Territory

RET Commonwealth Department of Resources, Energy and Tourism

RMEC Retail Market Executive Committee

RP Responsible Person

RPWG Retail Policy Working Group (as established under the MCE)




SCO Standing Council of Officials (as established under the MCE)

SMCN Smart Metering Communication Network

SMMS Smart Metering Management System

SMWG Smart Metering Working Group (as established under SCO)

SWIS South Western Interconnected System in Western Australia

TRWG Technical and Regulatory Working Group

WEM Wholesale Electricity Market (Western Australia)

WAIMO Western Australian Independent Market Operator

WIGS Wholesale Inter-connector Generator and Sample




Appendix B MCE Outputs and Related Workstreams

On 13 December 2007, the Ministerial Council on Energy (MCE) agreed the following:

MCE Outputs Related Work Streams

(a) develop and recommend technical specifications, performancerequirements and amendments to functions, based on a sound benefitscase.

All excluding Regulation

(b) develop and recommend service standards, including analysis ofcost implications;


(c) propose supporting National Electricity Rule changes and relevantchanges to Western Australia and Northern Territory instruments; and

Regulation

(d) develop appropriate supporting technical documentation throughstandards and/or NEM Procedures.

Business Processesand Procedures

(e) consider any related decisions arising from Phase 2 of the Cost-Benefit Analysis.


On 13 June 2008, the MCE provided further clarification and requested advice from theNSSC along the following lines:


(f) agree with the SCO by the end of July 2008 detailed workingarrangements, which will include the broader scope of work in theMCE’s decision

Complete

(g) advise the MCE by the end of 2008 the specific HAN standard to beadopted

Business Requirements

Defer to 2009

(h) provide advice to the MCE on the architecture of the nationallegislative and regulatory framework for Smart Metering within the NEMto enable the MCE to finalise by the end of 2008 a timeline forfinalisation of these arrangements

Regulation

NSMP Work Plan

(i) develop the technical and operational aspects of the nationalregulatory framework for Smart Metering in the NEM for agreement withthe SCO – the detailed timeline for completion of this framework will beagreed between the NSSC and the MCE by the end of 2008


NSMP Work Plan

(j) advise the MCE on issues related to the National Energy CustomerFramework when the MCE consults the NSSC

All

(k) review access to and protection of Smart Meter data, in conjunctionwith the MCE’s Consumer Protection and Safety Review

All

(l) coordinate pilots and conduct business case studies to share results,optimise learning and ensure all aspects of Smart Meters andassociated systems, and their impact on network and market operationand customer responses are tested

Pilots and Trials

(m) provide timely advice on detailed national minimum functionality forSmart Meters to maximise benefits across all stakeholders - thisincludes functions referred by the MCE to a technical stakeholdergroup, to develop and advise on technical definitions, performance andservice level requirements and relevant Rules






(n) recommend to the MCE how direct load control capability can beintegrated into priority appliances - this analysis should be undertakenin conjunction with the existing appliance energy standards workcurrently being conducted by both the Equipment Energy Efficiency(E3) Committee of the National Framework for Energy Efficiency, andStandards Australia


(o) advise the MCE on whether direct load control should be furthertested and explored through the Smart Meter pilots to identifymechanisms to maximise the benefits and to consider the level ofnetwork demand management that can be achieved

Pilots and Trials

(p) advise the MCE on whether there is a need to provide guidelines tosupport development of the in-home display market


(q) propose to the MCE defined service standards for access to theHAN to optimise innovation and uptake of in-home services


(r) advise the MCE on the whether insufficient interoperability betweendifferent meters, communications infrastructures and meteringmanagement systems may introduce further market power risks orreduce competition in metering - in particular:

(i) the materiality of this risk

(ii)international progress on communications standards and practices tosupport interoperability

(iii)the most appropriate framework to manage this risk in the Australianmarket


(s) consider the separate existing arrangements in the WesternAustralian energy market and the Northern Territory system and theneed for separate regulation and potential variations specific to thosesystems to maximise consistency where beneficial.

All

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