International Confederation of Energy Regulators. REPORT on Experiences on the Regulatory Approaches to the Implementation of Smart Meters

Transcription

1 International Confederation of Energy Regulators REPORT on Experiences on the Regulatory Approaches to the Implementation of Smart Meters Ref: I12-C&A April 2012

2 Table of Contents... 1 Introduction Methodology Summary of Main Findings The case study markets Canada Ontario France Great Britain Italy Sweden United States of America Colorado Who should lead the smart metering policy? How long should smart meter implementation take? Is it necessary to undertake an impact assessment? How should the smart metering regulatory framework be structured? Should meter functionality be set centrally and how? How should meter interoperability be established? How do regulators ensure adequate preparation and testing for implementation? How should cost recovery be organised? How should consumers be engaged in the implementation process, and at what level? How should data between the meter and service providers be managed? How should customers data be protected? Is a pricing policy required where meters allow time of day tariffs? Are addition consumer protection measures required? How can smart metering systems be made sufficiently flexible to accommodate future developments, such as smart grids? Annex - ICER List of abbreviations... 17

3 Introduction Smart meters enable faster automated communication of information to consumers on their real time energy consumption, and to service providers, including gas and electricity suppliers. Smart meters can also enable the provision of new services to consumers. These advantages and opportunities mean that the implementation of smart meters is being actively considered in many jurisdictions across the world. However, the implementation of smart meters is a complex task with many difficult decisions and choices. ICER has asked its members with experience of implementing smart meters to contribute case studies which explain the regulatory challenges they have faced, how they addressed them, and their experience of the outcome. We have also prepared an overview report which analyses the case studies and draws common themes from them on the key challenges to be addressed. In this way we hope to provide information which will assist the many regulators, policy makers and commercial organisations who are still faced with the challenge of smart meter implementation. 1 Methodology In order to prepare this report a drafting group of interested national regulatory authorities and regional regulatory associations was formed under the umbrella of ICER. The approach used was the development of a portfolio of case studies based of those regulatory jurisdictions with direct experience of the implementation of smart metering systems. The group decided to use, as an example for the preparation of case studies, an existing document by ERGEG (European Regulators Group for Electricity and Gas) called Guidelines of Good Practice Regulatory Aspects of Smart Metering for Electricity and Gas 1. Six case studies were prepared, together with a number of other contributions in the form of further background information. Copies of the case studies are available as separate Annex documents. The form of the case studies is deliberately free. The intention is to allow individual regulatory authorities to describe their experience in the process of smart meter implementation. These case studies have been analysed and the group has identified common key themes which it regards as being important for any future project relating to the implementation of smart metering systems. This analysis has been presented in a single overview report. 1 ERGEG report E10-RMF-29-05

4 2 Summary of Main Findings The countries surveyed all have mature gas or electricity markets. Nevertheless, there are very marked differences in the level of established competition, market structure and market size. As a result the approaches adopted to tackle identified challenges relating to the implementation of smart meters are specific to the circumstances of each market. Nevertheless, there are marked similarities which make comparisons between the different markets a useful exercise. Common central challenges can be identified from the case studies. These challenges relate to: the design of the regulatory framework for smart metering; the rolling out of smart meters; the organisation of the decision making process itself; and the protection of consumer interests from potential negative consequences of smart meter implementation. These common challenges are set out in this report. Within the spectrum of the compiled case studies it is recognized that the policy impetus and implementation considerations relative to electricity smart meters are, in the majority of cases, different from those relevant to gas smart meters. This has often resulted in either separate and distinct plans for the roll-out of the two infrastructures within a jurisdiction or the decision to only implement electricity smart meters at this time. The findings contained in this overview are focused on the regulatory approaches to the implementation of smart meters and are generally applicable to both infrastructures. Where a more detailed applicability of the findings is required, a reading of the specific case study should be undertaken. The main findings from the experiences reflected in the case studies are: a) A clear decision on which organisation is leading on smart metering policy is needed at an early stage. The lead body could be government, the national regulatory authority, or a commercial body. In the case of a commercial body, the government or regulator must still retain overall responsibility and will need to act to ensure that the smart metering model developed through commercial mechanisms is rolled out to other areas and is based on a sound legal and regulatory framework. b) Pilot exercises to demonstrate the technology, but also to develop the appropriate commercial and regulatory arrangements, are very useful. Experience resulting from pilots and full implementation is growing rapidly which may reduce the need for pilot exercises. c) The full implementation of smart metering needs careful preparation and implementation. Experience suggests that in each market the process may take some years top complete. d) An impact assessment (i.e. an analysis of the potential positive and negative effects of smart meter implementation including, but not limited to, a cost benefit analysis is a useful tool to develop sound policy proposals. e) In countries where smart meters have been successfully implemented the technical framework is clearly set out together with clear roles and responsibilities for market participants. In particular, these arrangements address: the ownership of the meter; the minimum functionality of the meters; the establishment of standards to ensure the interoperability of meters (potentially from different manufacturers); how and when costs of implementation can be recovered; and the design of preparation and testing for smart meter roll out.

5 f) The level and depth of engagement of consumers in the policy making process should be established early on. There are examples of consumers being engaged closely in the development of the functionality element of smart meter specification, and in the roll out process. g) The measures required to protect consumers from the potentially negative impact of smart meter implementation should be carefully considered. The main challenges identified in the case studies are the risk that consumers will be unable to make rational choices if the time of day tariffs offered by suppliers is too complex, and that the data produced by smart meters could be misused if not properly protected. Some markets have a regulated section of the market where consumers can obtain regulated prices and avoid pure market based prices. Others have not retained a regulated element of the market and all consumers must participate in the competitive market. Some markets have implemented data protection policies which are based on the concept that consumers should control the data produced by the meters (and thus must give permission for its use), apart from the data essential for the operation of the electricity market. These market rely on broad (i.e. not energy market specific) data protection legislation to protect electricity and gas consumers. Some other markets have specific rules on data protection applied by the national regulatory authority. h) Consideration should be given to the ability of the proposed smart meter model to accommodate future developments in technology and the market (e.g. smart grids). The case studies illustrate that this is well recognised, but in practice is very difficult to do. Different aspects of future market development have been identified in each of the case studies and these will assist in clarifying the likelihood of future developments impacting on smart metering arrangements. 3 The case study markets The six markets which have been examined through case studies are: a) Electricity and gas: - France - Great Britain - Italy b) Electricity: - Canada Ontario - Sweden - United States of America Colorado Further background information was provided by the Australian regulator and by ERRA (Energy Regulators Regional Association). The markets covered all have mature electricity and gas markets and this is to be expected in those countries that have already begun, or completed, the transition to smart meters.

6 3.1 Canada Ontario Ontario has 4.8 million electricity customers served by around 80 local distribution companies, most of which are wholly owned by municipal governments. They cover a service area of square kilometres. Retail electricity rates are regulated by the Ontario Energy Board (OEB) including time of use tariffs. Ontario Power Authority (OPA) has responsibility to plan and procure new generation and transmission capacity. There is significant non-market pricing, a mixture of public and private financing, and centralised planning by a government agency. 3.2 France The French electricity and gas retail markets were deregulated on 1 July The Distribution System Operator (DSO) operates as a monopoly. Gas and electricity supply markets have been fully opened to competition on 1 July France has 35 million electricity customers served by around 160 DSOs. ERDF operates 95% of continental grids. The rest of the continental territory is operated by local companies among which 4 have more than 100,000 customers. In Corsica and in overseas territories, EDF SEI is the DSO for more than 1 million customers. In gas, there are 25 DSOs for 11 million customers. GrDF operates distribution for more than 96% of the customers and the rest is operated by 23 local companies and one private and two of them have more than 100,000 customers. Most of the local distribution companies are owned by municipal governments. 3.3 Great Britain Electricity and gas markets cover 30 million households and businesses, and over 50 million meters. Both the gas and electricity markets are fully competitive. Competition has been introduced in metering, principally electricity metering. The regulator of Ofgem. 3.4 Italy In 2010, electricity demand in Italy was above 300 TWh. About 5 million households and 2.7 million small businesses have chosen their supplier in the free market; the other 27 million LV customers, mostly household and small business) are covered by a regulated universal supply" regime. The Italian Regulator (AEEG) issued a decision at end of 2006 that introduced mandatory roll-out of smart meters for all DSOs. The gas retail market consists of almost 21 million customers: 92.2% are domestic customers, 1.3% are central heating providers, 5.2% are trade and services businesses, 1.2% are in manufacturing and less than 1% are power generators (in terms of volumes the shares obviously tend to reverse). The gas market is fully open. The ownership of natural gas distribution facilities remains fragmented.

7 3.5 Sweden The Swedish electricity market was deregulated on the 1st of January The Distribution System Operator (DSO) operates in a monopoly market. Energy is bought on the Nordic energy exchange Nord Pool Spot which is owned by the national TSOs from Denmark, Finland, Norway and Sweden. There are 5.2 million electricity customers in Sweden and the average consumption is kwh. There are about 170 DSOs and 127 suppliers acting in the Swedish electricity market. The switching rate for household customers in 2010 was 13%. Somewhat fewer (1,5% lower than in 2009) 19 % of the household customers had renegotiated or changed the terms and conditions with their current supplier. 3.6 United States of America Colorado Colorado has a population of 5 million people within an area of 104,100 square miles. There are two major investor owned utilities (Black Hills Energy and Xcel Energy), 29 municipal utilities, and 26 rural electricity utilities. Xcel launched a pilot programme for the deployment of smart meters in the City of Boulder. 4 Who should lead the smart metering policy? There are a number of possible candidates for the organisations that ultimately are responsible for deciding the approach to smart metering and on implementation. Different markets and circumstances have resulted in different approaches. In the case study countries the policy leadership was assumed by different organisations: Canada Ontario Government France Regulator (CRE) within legal framework set out by government Italy Regulator (AEEG) following a commercial project in the electricity market and by the Regulator (AEEG) in the gas market Great Britain Government Sweden Government United States of America Colorado Commercial initiative followed by Government 5 How long should smart meter implementation take? The experience gathered from the case studies suggest that the implementation of smart metering systems can take some years. However, in many markets pilot studies have been undertaken, either as part of a centrally planned approach or as a result of a commercial initiative. As experience is gathered and shared, it can be expected that the need for such pilots is reduced. In Ontario, the Government passed legislation in 2006 establishing a new smart metering entity to implement the smart metering programme. As of 31 August 2001, 4.7 million smart meters had been installed, of which 3.1 million were on time of use billing.

8 In France, ERDF presented to CRE a smart electricity metering project in CRE has since developed guidelines which describe functionalities of a smart metering system and the project begun in March CRE made a proposal to roll out a smart metering system based on the output of the experimentation done by ERDF with 250,000 customers and a proposal of order defining smart metering functionalities to the Minister in charge of energy. The Minister announced the roll out decision on 28 September 2011 and has published the order in January In 2007, GrDF proposed a new project of gas smart meters for the mass market. The project has since been developed and CRE passed on to the Ministers a proposal of preliminary approval of GrDF s project by deliberation of 21st July In Italy, in the second half of the 1990 s Enel Distribuzione, the largest Italian DSO, launched a project, named Telegestore, aimed at building a comprehensive Automated Metering Infrastructure (AMI) for its entire customer base (over 30 millions LV customers). Implementation started in 2001 and Telegestore is now a system made of 32 millions electronic meters, more than 350,000 data concentrators (located in MV/LV substations) and some thousands of meters in selected secondary substations, fully dedicated to energy service applications. The Italian Regulator announced a roll-out of smart meters for gas in July 2006 and, after an extensive consultation and a cost-benefit analysis, in October 2008 (with decision no. ARG/gas 155/08), it introduced a regulatory framework to implement one of the most ambitious full scale project aimed to install smart meters in all 21 million redelivering points (of which over 19 million household consumers) by Some aspects of implementation have since been deferred. 6 Is it necessary to undertake an impact assessment? Most of the organisations responsible for the implementation of smart metering systems undertook impact assessments (IAs), including a cost benefit analysis. Those that did clearly used the results of the IA to inform future decisions on the implementation of smart metering systems. In Great Britain, a full IA was undertaken by Government which demonstrated that there would be net public welfare benefits from the implementation of smart meters. In Ontario, OPA undertook a study in 2005 which included impact of smart meters which concluded that they could result in a peak load reduction of 2%. In Sweden, The NRA undertook a CBA in 2002 on metering reform that showed a yearly surplus for the society as a whole of 600 million SEK. The estimated costs were 10 billion SEK. However the costs and benefits were unevenly distributed among the stakeholders. The NRA made a new CBA in 2010, regarding hourly metering for household customers, where there was a positive outcome for customer that used more than kwh had hourly metering. The Italian Regulator undertook an extensive consultation and a cost-benefit analysis before a decision announced in October 2008 to introduce a regulatory framework to install smart meters in all 21 million gas consumption points (of which over 19 million household consumers) by 2016.The publication of the 2008 AEEG s resolution was preceded by a long consultation process involving also technical working groups with operators.

9 In France, CRE commissioned techno-economic studies in relation to both electricity and gas. In electricity the study showed that the costs and benefits of the project for the DSO and for the whole of society were financially balanced in the area of ERDF and positive for the whole of society. In gas the study updated of the business model prepared in 2008 by GrDF and took into consideration the impact in energy savings. The second phase started at the beginning of 2011 and aimed to adjust the results of the techno-economic study according to the pilot project results. At the end of the 2nd phase, the study concludes that NPV is balanced with the gains of energy savings. 7 How should the smart metering regulatory framework be structured? In most of the case study markets (Ontario, France for gas, Italy and Sweden) the meters are owned and maintained by the distribution system operator. In Colorado the meters are owned and maintained by the vertically integrated utility. In Great Britain, suppliers own and maintain the meters. In France, electricity meters are owned by municipalities or their association and maintained by the DSO. 8 Should meter functionality be set centrally and how? Most of the case study markets have specified the minimum functionality of the smart meters to be installed. The functionality of smart meters is an important factor in determining the services that can be provided to customers through the smart meter, as well as the capacity of the smart metering system to serve the needs of market participants. The organisation responsible for establishing minimum functions is different across the case study markets. In some it is the Government, some the regulator, and some a specialist standards body. In Ontario, the minimum functionality of meters is set out in a regulation. The specification includes the collection of hourly metering data, communication protocols and data transfer to a centralized meter data management repository. Hourly consumption data is available for most consumers (optional service provided by the distributors) through internet access. All consumers are provided with consumption amounts by time of use period on their invoices. In Great Britain, specifications are established by Government. A government-facilitated approach was established whereby the centrally mandated meter functions must be developed collaboratively by industry in a process open to third parties. The functionality of gas and electricity smart meters included: in home display for domestic customers only; wide area connection module to provide two way communications to a central data management body; and a home area network to connect smart meter to smart devices in customers' homes. In Italy and France, the key functional requirements are defined by the regulators, AEEG and CRE. In Sweden and Colorado, no minimum functionality of smart meters is set out in regulations overseen by the NRA. Meter regulation is currently under separate standards agencies.

10 9 How should meter interoperability be established? Interoperability is the term used to define the standards which must be applied in order to ensure that meters can operate with each other and with the central systems to which they are connected. In Great Britain, the essential elements of meter functionality will be translated into regulations to ensure interoperability. Resulting meter specifications should allow interoperability between meters produced by various manufacturers and purchased by numerous suppliers. The regulator will monitor and regulate compliance and manage future development of the specifications. In Sweden, the standards agency SWEDAC is responsible for interoperability and standardisation being followed for all meters. In Italy, AEEG is responsible for specifying the key functional requirements of smart meters and one of its central regulatory concerns is to ensure interoperability. In Colorado, following the commercial pilot the legislature passed legislation to create a 'Colorado Smart Grid Task Force' to make recommendations on the feasibility, cost and timing of a transition to a secure, resilient and technologically advanced electricity grid. The resulting proposals included the need for systems to be technologically agnostic, open and interoperable. These recommendations have not yet resulted in further action. In Ontario, the interoperability standards are set by regulation and ensure that all meter data can be collected and utilised on a centralized basis. In France, interoperability is ensured by CRE guidelines and secondary legislation. 10 How do regulators ensure adequate preparation and testing for implementation? Of those case studies which commented on this aspect, three describe centrally defined implementation plans which include phases for preparation and testing. By contrast, one describes an approach which relies on industry mechanisms for the success of this phase. In Italy, the regulator (AEEG) established an installation and commissioning timetable for all gas and electricity DSOs, organised into four or more phases based on categories of customers. In Great Britain, a robust end to end testing and trialling strategy is being developed. The management of transitional issues as smart meters live alongside traditional meters during the roll-out period. In France, two smart metering projects are being implemented by the main French DSOs respectively: GrDF in gas and ERDF in electricity. Both projects have identical stages (experiment, phase of construction of the project, roll out) but are structured differently. The roll out of smart meters to other areas is subject to a timetable prepared by the regulator (CRE) and approved by government. In Sweden, DSOs undertook testing projects prior to making a decision to roll-out new meters. The regulator was not involved.

11 11 How should cost recovery be organised? In most countries, the cost of meter roll out can be recovered either through the regulated network tariffs or through customers bills. Some regimes have included regulated incentive arrangements designed to facilitate the efficient roll out of meters. In Sweden, the DSO has the right for cost recovery for relevant and cost-efficient investments made in the network according the regulation on network-tariffs. Sweden has a system of ex ante regulation which means that the NRAs decide, based on material provided by the DSO, the bulk of network-tariffs each DSO can charge over a period of four years. This regulation begins from 2012 and onwards. Sweden has previously had an ex post regulation. In Italy, AEEG regulations allow cost recovery through metered tariffs of installations based on differentiated allowed revenues according to the type and quantity of meters actually installed, and reduced allowed revenues for DSOs who fail to meet deadlines. In Ontario, the regulator (OEB) decided to allow costs of smart meter installation to be included in LDCs' rates from Costs are to be recovered over a period. In Great Britain, suppliers are allowed to recover costs through customers' bills. No up-front cost recovery is permitted. In Colorado, the intention of the commercial initiative was to have an end to end configuration (including in home displays and home area networks) but in the event costs proved prohibitive. This has resulted in a rate case between the commercial entity (Xcel) and the regulator (Colorado PUC). In France, cost will be recovered through regulated network tariffs paid by customers. Regulated incentive arrangements will be implemented. 12 How should consumers be engaged in the implementation process, and at what level? In some markets consumers and other stakeholders were fully integrated into the process of implementing smart meters from the design stage. In other markets consumer information was seen as an important route to consumer engagement. Consumer engagement can relate the use of smart meter information and to the process of installation. In Ontario, the regulator (OEB) undertook a pilot test project in 2006 to understand consumer reactions and impacts which would result from time of day tariffs. Results indicated 6% reduction in energy consumption. The government subsequently developed a communications strategy and execution plan for smart meter roll-out including information packs for dissemination. In France, the regulator (CRE) has organised, since 2007, working groups with all electricity stakeholders (consumers organisations, suppliers, DSOs, grid owners and public Authorities).The groups have defined the information to be provided to consumers involved in the electricity project and proposed additional functionalities to the meter for the full roll out. In gas, consumers are closely integrated into the GrDF pilot project.

12 In Great Britain, consumer awareness is recognised as a key objective in order to encourage behavioural change, to optimise the benefits of smart meters. Awareness relating to the process of meter installation and an installation code of practice is being developed. In Italy, the regulator (AEEG) has, since 2008, conducted studies and customer surveys to identify small consumers needs and willingness to pay, to have a remote (in house) display and suitable information to implement demand response, and also to study the price elasticity of electricity consumption. In Sweden, from July 2009 customers have received monthly bills based on actual consumption. This has led to increased customer awareness of the electricity-market. The last two winters have seen high prices which have led to an increased interest in market functioning and a driver for hourly meter readings which will give the customer a higher degree of control over consumption and costs. Some customer have opted for a flat rate all year around not to have low bills in the summer and high in the winter. 13 How should data between the meter and service providers be managed? Three of the case study markets commented on this. Two markets (Great Britain and Ontario) decided upon a central body to manage the data flows between meters and service providers, whilst in the other market (Sweden) a decentralised approach was adopted. In Great Britain, data and communications services to be undertaken by a regulated monopoly. The costs of the monopoly provider will be regulated and recovered through suppliers. The critical challenge is to ensure that the communications infrastructure can handle current and future requirements, including those relating to smart grids. In Ontario, a central body was established in legislation to implement smart metering and to have responsibility for the collection of data and the right to own and operate databases. The legislation provides for non discriminatory access to data for distributors, retailers and the regulator, and to the telecommunications system which transmits the data. In Sweden, contacts between relevant market participants are bilateral and based on secondary regulations as far as who should send what to whom. The DSO acts as a neutral market facilitator in contacts with other stakeholders. There is a voluntary hub/database called EMIX which some of the stakeholders are members of. Furthermore there is a framework in the form of a code of conduct which regulates some detailed processes between stakeholders. 14 How should customers data be protected? In three of the five cases which commented on this topic, there is an explicit approach whereby consumer s data is under their control with only specified exceptions. On other cases the use of data is subject to regulation.

13 In Ontario, distributors are obliged to provide verified and unverified meter usage data to consumers. In the case of unverified meter data consumers must pay the cost of providing the data; the timing for providing the data is negotiable; access may be curtailed if technical problems arise; and the consumer remains responsible for the consequences of data access if they assign the access right to an agent. Ontario privacy laws apply to meter data. Personal data can be released only with the permission of the relevant individual, or for the purpose it was collected. Data is subject to industry standard encryption. The central data systems are subject to annual independent audit. In Great Britain, the approach to data privacy is that consumers choose how their smart metering data is used and by whom, except where the data is required to fulfil regulated duties. Provisions must comply with existing data privacy legislation. In Sweden, the customer is in control of the data generated by the customer. The DSO needs data for managing the grid. The DSO and supplier need data for billing. General privacy and security rules apply. There are no rules specific to the energy market. In Italy, the regulator (AEEG) sets the rules (or mandates them to standardisation organizations) relating to security of data (inside the meters, during the transmission to the control centre, prompt transmission to the control centre in case of meter failure). In Colorado, the issue of data protection is still under consideration. The Colorado regulator (PUC) is developing a policy on data privacy in consultation with stakeholders and is addressing issues of data ownership and data access. Cyber security is already well developed in the industry in the US, but federal organisation (FERC and NIST) continue to work on developing standards further. Colorado PUC has taken an initiative to develop an energy assurance and emergency plan which is nearing completion. In France, general privacy and security rules apply. According to a decree (secondary legislation) consumption data belong to consumers who can allow ESCO or suppliers to access to. A ministerial order provides specific security rules. 15 Is a pricing policy required where meters allow time of day tariffs? The introduction of smart meters enables the introduction of time of day tariffs which are more reflective of actual supply and demand costs. Some markets have allowed market forces to determine the tariffs suppliers may charge in this new environment, whilst others have taken a more cautious approach. In Sweden and Great Britain, market based retail pricing is based on competition. In Ontario, a regulated retail price plan is in place set by the regulator (OEB) which includes time of use tariffs which are to be mandatory. Key features of the price plan include: supply cost recovery; three price periods; seasonal variations in demand load curves. In Italy, the mandatory introduction of a Time-of-Use (ToU) electricity price for all small customers has been in place since July, 1st 2010 and will by fully phased-in by end The aim of the initiative is for small users to be exposed to cost-reflective prices and so to provide them with information on the economic value of the choices they make about electricity use. A regulated universal supply regime is also in place.

14 In Colorado, the commercial (Xcel) pilot offers the following retail pricing choices: standard time of use; critical peak price rate; peak time rebate rate. In support of this aspect of the pilot, Excel installed automated meters. 16 Are addition consumer protection measures required? Some of the markets studied have specific measures to protect smaller consumers. In one case these measures include access to a regulated area of the retail market, whilst in others the consumer protection measures relate to ensuring the fair operation of the competitive market. In Italy, small consumers have access to a regulated universal supply regime. In Great Britain, measures are in place to protect vulnerable consumers is being implemented, including switching, moving customers from credit to prepayment mode, and remote disconnection. In Sweden, there are no specific tariffs for vulnerable customers or specific protection in the energy-market except for disconnection which is regulated in law. The customer is protected in some cases (where applicable) by the distance selling law and general marketing rules. The customer also has access to alternative dispute settlement procedures if there is a dispute. 17 How can smart metering systems be made sufficiently flexible to accommodate future developments, such as smart grids? The introduction of new technology into the networks poses the challenge of how to ensure that it will have the capability to adapt to future developments. In Ontario, the development of meter functionality to complement introduction of smart grids is under consideration as well as the utilisation of smart meter data and communications infrastructure to better manage the supply demand balance as embedded generation levels grow. In Italy, the next steps in regulation will be to continue to focus on demand response and customer services. A recent consultation launched in 2011 envisages further demonstration projects for standard interfaces on the smart meter open to all retail suppliers wishing to offer innovative solution to their customers. In gas it is proposed to provide incentives to pilot projects aimed to develop multi utility meters. In Sweden, the following projects are in focus for analysis during 2012: abolishing default contracts in order to enhance customer activity, hourly read customers, competitive metering market, and enhancing the development of smart grids.

15 In Great Britain, the knock-on implications for more accurate and timely settlement of customer bills is under examination as consumers are currently settled initially on the basis of estimated profiles, not real time consumption data. Other key developments include: enhancements to the customer switching process; consumer protection as smart meters allow more sophisticated products onto the market; co-ordination of regulatory changes across the industry as innovations in smart meter technologies develop; and the development of meter functionality to complement introduction of smart grids.

16 Annex - ICER The International Confederation of Energy Regulators is voluntary framework for cooperation between energy regulators from around the globe. Its aim is to improve public, and policymaker, awareness and understanding of energy regulation and its role in addressing a wide spectrum of socio-economic, environmental and market issues. By establishing this voluntary confederation, with regular and structured contacts and cooperation between regulators, the world s energy regulatory authorities hope to exchange information and best practices in the regulation field and to make a significant contribution to the evolution towards a sustainable planet. More information is available at / This report was prepared by the Affordability and Competitiveness Virtual Working Group (VWG3).

17 List of abbreviations Term AEEG AMI CBA CRE DSO ERGEG ERRA IA ICER IERN NRA OEB OPA ToU Definition Autorità per l'energia Elettrica e il Gas Automated Metering Infrastructure Cost benefit analysis Commission de Régulation de l'energie Distribution System Operator European Regulators Group for Electricity and Gas Energy Regulators Regional Association Impact assessment International Confederation of Energy Regulators International Energy Regulation Network National regulatory authority Ontario Energy Board Ontario Power Authority Time of Use