COMMISSION FOR ENERGY REGULATION

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1 PROPOSED NATIONAL ROLLOUT OF ELECTRICITY AND GAS SMART METERING (CER11191) AIRTRICITY RESPONSE TO COMMISSION FOR ENERGY REGULATION 13DECEMBER2011

2 INTRODUCTION Airtricity welcomes the opportunity to comment on the Commission s consultation on the Proposed National Rollout of Electricity and Gas Smart Metering (CER11191). In light of the positive results of the smart metering technology trials and associated costbenefit analyses, we agree to the proposal to proceed to the next phase of the smart metering rollout project. While in support of Smart Metering rollout, we believe there are some areas for which CER needs to provide greater clarity to ensure that the implementation delivers on its desired objectives and within budget. Our answers should be understood in the context that detailed work needs to be done to determine the final business requirements, but in general we agree with the proposed approach. Our responses to the specific question raised in the consultation follow; Q1. Respondents are invited to comment on the proposed decision by the CER to proceed with the national rollout of electricity and gas smart metering as outlined in Section 2. Are you in favour of this proposal? Outline reasons for agreement or disagreement. SSE has been a leading participant in the UK government sponsored Energy Demand Reduction Project (EDRP), in which smart meters were the subject of a trial; in 2008/09 we installed around 9,000 smart meters in homes in Perthshire, Oxfordshire and in South Wales. Evaluation of the latest set of results from the EDRP indicates that significant savings in the energy usage can be achieved by customers with smart meters. With similar experience and results achieved from the GB trial, we support the CER proposal to progress the nation rollout of smart metering. We do however have one concern. 1 Although this is a separate issue from smart metering; the treatment data and related and obligations on suppliers needs to be properly explored in the business requirement and design phase, in view of the operational and cost impact to the suppliers. Q2. Respondents are invited to comment on the proposed objectives of the National Smart Meter Programme outlined in Section 3. Are you in favour of the proposals? Outline reasons for agreement or disagreement. In a competitive energy market, suppliers want to deliver direct benefit to consumers. These benefits could lower direct energy costs or saving by peak shaving to avoid peak 1 Section 2.1, reads in part Electricity consumers that are currently designated by Electricity Market rules as settlement Customers (a.k.a Quarter Hourly or QH Customers) have interval meters that allow quarter hourly energy consumption data to be captured and remotely read on a daily basis and are therefore not included in the scope of the national electricity smart metering rollout...

3 wholesale energy price. They are likely also to offer improvement to customer experience in the interaction with suppliers. Given that these elements are represented within the proposed objectives, we agree with their adoption. Q3. Respondents are invited to comment on the proposed working assumptions outlined in Section 4 relating to data ownership, display and provision. Are you in favour of the proposals? Outline reasons for agreement or disagreement. 1. Data Granularity The granularity made available to suppliers should be informed by the requirements of energy settlement Currently the wholesale market works on a half hourly pricing for electricity, where for gas, balancing is daily. In both cases, data granularity must be consistent with settlement process and should not preclude necessary changes in the wholesale market. This needs to be properly explored prior to delivery of final design. 2. Data Access for Suppliers We welcome the proposal for suppliers to access data on both push and pull basis, depending on their individual requirements. We however have concern that potential capacity constraints at the data portal could impact suppliers operations 3. Data Access for Consumers Based on SSE s trail in GB, we believe that customers should be have access to information relating to their historical consumption data. 4. Billing Content, Frequency and Tariffs We are in favour of leaving up to suppliers. Market design should not preclude development of other tariff types or other innovations. 5. Data for Prepayments While we have previously agreed that a thin prepayment solution is workable, even without displays on meters, this depends on availability of other means of providing information on credit balances. Although, there are significant advantages with thin client metering (e.g. unlimited tariff options, value add on flexibility, minimisation of PPMIP and NSP roles and potentially cheaper meter) these all depend on the reliability of the communications system that maintains contact with the meter. Our experience in GB suggests that there are practical difficulties with maintaining prepayment information remotely since, if communication is lost so is the ability to activate the contactor switch to de/energise the supply. If the customer is off supply they will stay off until communication is restored or the contactor is manually reset. If communication issue persist, engineer visits and/or an advanced communication solution is required to overcome the difficulties with the standard setup; both of which will add cost. This has the effect of making the pros of thin client seem like nice tohaves, while the cons have the potential to impact customers adversely.

4 With a thick prepayment solution, a temporary or prolonged loss of communication will not stop the customer from obtaining their supply, as the meter has a local credit entry function and the tariff is also managed on the meter. This also has advantages for debt management. For example, if the customer was about to run out of credit when meter communications were lost, then a requirement to buy credit would be clear and the meter would be updated when this was purchased. With a thin client meter, the customer would not realise that the credit had run out and could run up a significant debt before the communications problem was rectified. 6. In Home Data IHDs are not necessarily appreciated by all customers; rolling out a cheap basic model with the meter will allow suppliers to offer more advanced versions later on, in support of innovative products. Many customers will ignore or discard their displays, so it would be neither cost effective nor sustainable to mandate Suppliers to provide IHDs. The cost of these should be focused on those willing to make use of their features. NB: An open protocol is therefore required for the HAN to accommodate a range of display types. 7. Data Security and Protection We agree that security and data protection are paramount and it is right that they are at the fore of smart metering systems design. Issues of data protection must be considered during design; who owns data and impact if CoS occurs. 8. Vulnerable Customers While we have no specific details on data provision and accessibility requirements for vulnerable customers, it is important that the need of such people are properly considered Q4. Respondents are invited to comment on the proposals outlined in Section in relation to the electricity smart meter functionality requirements. Are you in favour of the proposals? Outline reasons for agreement or disagreement. The proposed functionality is a good starting point, but will have to be considered in far greater detail during the design phase. Q5. Respondents are invited to comment on the proposals outlined in Section in relation to the gas smart meter functionality requirements. Are you in favour of the proposals? Outline reasons for agreement or disagreement. See answer to question 4 Q6. Respondents are invited to comment on the proposals outlined in Section in relation to the Wide Area Network (WAN) functionality and technology. Are you in favour of the proposals? Outline reasons for agreement or disagreement.

5 See answer to question 4 Q7. Respondents are invited to comment on the proposals outlined in Section in relation to the Home Area Network (HAN) functionality and technology. Are you in favour of the proposals? Outline reasons for agreement or disagreement. We welcome the general concepts outlined for the HAN communications. However, as noted in the consultation document, a watching brief is essential, to avoid unnecessary exclusion of useful developments that occur prior to actual rollout. Q8. Respondents are invited to comment on the proposals outlined in Section in relation to the procurement model. Are you in favour of the proposals? In particular, which of the two IHD provision responsibility options outlined do you prefer? Outline reasons for agreement or disagreement. We support the procurement strategy of Electricity and Gas Smart meters by both ESB and Bord Gáis, which includes ownership and service provision. A baseline guideline on data display capability is important. Provision of minimum specification in IHDs in the initial rollout would provide a good starting tool for customers who wish to avail of the information without wasting money on high quality displays for customers which have little interest. However, as previously stated, we do not support Suppliers being mandated to provide IHDs to their customers. Provision of cheap IHDs by the network businesses for rollout will provide basic and cheap functionality, whilst also providing an opportunity for suppliers to differentiate themselves through use of more sophisticated units, supporting a wider variety of products. We therefore believe that an open architecture for the HAN and IHDs with no mandate on suppliers is the best value approach for a competitive market. Q9. Respondents are invited to comment on the proposals outlined in Section 6 relating to the implementation approach and timelines. Are you in favour of the proposals? Outline reasons for agreement or disagreement. Airtricity welcomes the phased approach to the smart metering project. Given the long duration of the project, the costs involved and the significant impact on such a wide range of stakeholders, the proposed project structure is well advised; the periods between phases will serve as useful decision and review points. Airtricity looks forward to the detailed Programme Plan and details of the proposed Programme Governance structure in Q as indicated by Commission. In anticipation of that we agree with separation of the planning and requirement stage (Phase 2) from the detailed design and implementation stage (Phase 3). Within Phase 3, we believe it would be useful to carry out a review between the completion of the detailed design and the actual installation of systems.

6 Finally, we are particularly concerned that the project takes full account of the costs faced by suppliers in supporting legacy metering arrangements and that by law or by process, the project ensures that customers are obliged to accept a smart meter. In this and all other areas of the project, suppliers must be fully involved in the detailed planning, to avoid unnecessary costs being imposed on them.

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