National Smart Metering Program. Memorandum

Transcription

1 National Smart Metering Program National Smart Metering Program Memorandum To: From: Interested Parties 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 nssc@smartmeter.org.au File Name: Memo v1.0.docx : Unrestricted

2 National Smart Metering Program National Stakeholder Steering Committee NSMP Deliverables Specification Version number: Version 1.0 Status: Author Final Harry Koller, Program Director Date published 28 November 2008 File name NSMP_Specification of deliverables_v1.0.doc

3 Table of Contents 1 DOCUMENT CONTROL VERSION CONTROL APPROVAL INTRODUCTION BACKGROUND PURPOSE OF DOCUMENT SMART METERING INFRASTRUCTURE SCHEMATIC IDENTIFICATION OF DELIVERABLES BUSINESS REQUIREMENTS WORK STREAM BUSINESS PROCESSES AND PROCEDURES WORK STREAM PILOTS AND TRIALS WORK STREAM REGULATION WORK STREAM RECOMMENDATION APPENDIX A GLOSSARY APPENDIX B MCE OUTPUTS AND RELATED WORKSTREAMS... 21

4 1 Document Control 1.1 Version Control Version Date Description Amended by: /10/2008 Initial Draft for NSSC Review and Approval by H. Martinson /10/2008 Amended draft for NSSC review and approval by H. Koller /11/2008 Amended draft in response to feedback from NSSC members Change document name Remove diagram Remove all examples of functional requirements Move recommended NEM procedures from Regulation to the Business Process and Procedures work stream. Incorporate NSMP Work Plan deliverable names into this document to have consistency with the NSMP Schedule /11/08 Revise for NSSC comments and changes made to ensure consistency with the Working Group terms of reference Revise for NSSC feedback received by COB 25/10/2008 H. Martinson H. Koller H. Koller H. Koller /11/08 Baselined post approval by NSSC H. Martinson 1.2 Approval Authorised by Signature Date NSSC 28/11/2008 Program Director MCE File Name: NSMP_Specification of deliverables_v1.0.doc Page 3 of 22

5 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 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) - description of the deliverables required under the NSSC terms of reference c) NSMP Roadmap - High level roadmap covering the period 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 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. File Name: NSMP_Specification of deliverables_v1.0.doc Page 4 of 22

6 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 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 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. in-home display CD#1 supply switch Retailer environment Distributor environment CD#2 eg: air conditioner HAN smart meter smart meter communication network smart meter management system B2B/MSATS network CD#3 hard wire control NEMMCO environment eg: water heater CD consumer s device new elements consumer remote connection existing elements File Name: NSMP_Specification of deliverables_v1.0.doc Page 5 of 22

7 File Name: NSMP_Specification of deliverables_v1.0.doc Page 6 of 22 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

8 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: File Name: NSMP_Specification of deliverables_v1.0.doc Page 7 of 22

9 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 Statement 3 prepared by SCO sets out the expected outcomes of smart metering: 1 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, page Op. cit., RIS, page 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, page 32. File Name: NSMP_Specification of deliverables_v1.0.doc Page 8 of 22

10 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) File Name: NSMP_Specification of deliverables_v1.0.doc Page 9 of 22

11 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. File Name: NSMP_Specification of deliverables_v1.0.doc Page 10 of 22

12 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 market 4 4 The 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 provide guidelines to support development of the in-home display market. Encouraging uptake may also involve some sort of incentive structure built into prices. If so, then there may be a need for the Regulation Work File Name: NSMP_Specification of deliverables_v1.0.doc Page 11 of 22

13 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 Consulting 5. 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 into distributor tariffs. 5 It is intended that CBA be an iterative process where the BRWG may at a later stage be asked revisit the SMI Functional Specification based on the outcomes of pilots and trials conducted by companies in each jurisdiction or the implementation experience of the Victorian energy companies in their AMI rollout which commences in mid File Name: NSMP_Specification of deliverables_v1.0.doc Page 12 of 22

14 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 2 6. a) Level 1 Summary Process a high level overview of the process defining the subprocess 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: 6 Note: 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. File Name: NSMP_Specification of deliverables_v1.0.doc Page 13 of 22

15 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 rollout 7 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: 7 In 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. File Name: NSMP_Specification of deliverables_v1.0.doc Page 14 of 22

16 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. 8 Op. cit. RIS, page Op. cit. RIS, page 108. File Name: NSMP_Specification of deliverables_v1.0.doc Page 15 of 22

17 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 Thereafter MCE is to be provided with a Pilots/Trials Progress Report on June 2010, June 2011, and June 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 (airconditioner, 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: 8 Regulation Work Stream 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 consumption 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 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) 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. 10 Op. cit. RIS, page Op. cit. RIS, page 116. File Name: NSMP_Specification of deliverables_v1.0.doc Page 16 of 22

18 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 businesses 12 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 12 Op. cit. RIS, page Op. cit. RIS, page 31. File Name: NSMP_Specification of deliverables_v1.0.doc Page 17 of 22

19 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 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. 14 Op. cit. RIS, pages File Name: NSMP_Specification of deliverables_v1.0.doc Page 18 of 22

20 Appendix A Glossary The following acronyms are in the NSSC Glossary. AEMC AER AMI AS B2B BPRG BRDRG CATS COAG DNSP EEEC ENA ERAA FRC FRMP HAN IEC IHD LNSP MCE MRG MSATS MTWG NCRE NEL NEM NEMMCO NEO NER NSMP NSSC NT RET RMEC RP RPWG Australian Energy Market Commission Australian Energy Regulator Advanced Metering Infrastructure Australian Standard Business to Business B2B Procedures Reference Group (as established under the IEC) AMI Business Requirements Definition Reference Group Consumer Administration and Transfer Solution Council of Australian Governments Distribution Network Service Provider Equipment Energy Efficiency (E3) Committee Energy Networks Association Energy Retailers Association of Australia Full Retail Competition Financially Responsible Market Participant Home Area Network Information Exchange Committee (as established under section 7.2A.2 of the Rules) In-home Display Local Network Service Provider Ministerial Council on Energy (established under the COAG) Metrology Reference Group (established under the RMEC) Market Settlement and Transfer Solution Metering Technology Working Group National Consumer Roundtable on Energy National Electricity Law National Electricity Market which excludes Western Australia and Northern Territory National Electricity Market Management Company National Electricity Objective (as set out in section 7 of the NEL) National Electricity Rules National Smart Metering Program National Stakeholder Steering Committee (RET Smart Metering program) Northern Territory Commonwealth Department of Resources, Energy and Tourism Retail Market Executive Committee Responsible Person Retail Policy Working Group (as established under the MCE) File Name: NSMP_Specification of deliverables_v1.0.doc Page 19 of 22

21 SCO SMCN SMMS SMWG SWIS TRWG WEM WAIMO WIGS Standing Council of Officials (as established under the MCE) Smart Metering Communication Network Smart Metering Management System Smart Metering Working Group (as established under SCO) South Western Interconnected System in Western Australia Technical and Regulatory Working Group Wholesale Electricity Market (Western Australia) Western Australian Independent Market Operator Wholesale Inter-connector Generator and Sample File Name: NSMP_Specification of deliverables_v1.0.doc Page 20 of 22

22 Appendix B MCE Outputs and Related Workstreams On 13 December 2007, the Ministerial Council on Energy (MCE) agreed the following: MCE Outputs (a) develop and recommend technical specifications, performance requirements and amendments to functions, based on a sound benefits case. (b) develop and recommend service standards, including analysis of cost implications; (c) propose supporting National Electricity Rule changes and relevant changes to Western Australia and Northern Territory instruments; and (d) develop appropriate supporting technical documentation through standards and/or NEM Procedures. (e) consider any related decisions arising from Phase 2 of the Cost- Benefit Analysis. Related Work Streams All excluding Regulation All excluding Regulation Regulation Business Processes and Procedures All excluding Regulation On 13 June 2008, the MCE provided further clarification and requested advice from the NSSC along the following lines: MCE Outputs (f) agree with the SCO by the end of July 2008 detailed working arrangements, which will include the broader scope of work in the MCE s decision (g) advise the MCE by the end of 2008 the specific HAN standard to be adopted (h) provide advice to the MCE on the architecture of the national legislative and regulatory framework for Smart Metering within the NEM to enable the MCE to finalise by the end of 2008 a timeline for finalisation of these arrangements (i) develop the technical and operational aspects of the national regulatory framework for Smart Metering in the NEM for agreement with the SCO the detailed timeline for completion of this framework will be agreed between the NSSC and the MCE by the end of 2008 (j) advise the MCE on issues related to the National Energy Customer Framework when the MCE consults the NSSC (k) review access to and protection of Smart Meter data, in conjunction with the MCE s Consumer Protection and Safety Review (l) coordinate pilots and conduct business case studies to share results, optimise learning and ensure all aspects of Smart Meters and associated systems, and their impact on network and market operation and customer responses are tested (m) provide timely advice on detailed national minimum functionality for Smart Meters to maximise benefits across all stakeholders - this includes functions referred by the MCE to a technical stakeholder group, to develop and advise on technical definitions, performance and service level requirements and relevant Rules Related Work Streams Complete Business Requirements Defer to 2009 Regulation NSMP Work Plan All excluding Regulation NSMP Work Plan All All Pilots and Trials Business Requirements File Name: NSMP_Specification of deliverables_v1.0.doc Page 21 of 22

23 MCE Outputs (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 (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 (p) advise the MCE on whether there is a need to provide guidelines to support development of the in-home display market (q) propose to the MCE defined service standards for access to the HAN to optimise innovation and uptake of in-home services (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 (s) consider the separate existing arrangements in the Western Australian energy market and the Northern Territory system and the need for separate regulation and potential variations specific to those systems to maximise consistency where beneficial. Related Work Streams Business Requirements Pilots and Trials Business Requirements Business Requirements Business Requirements All File Name: NSMP_Specification of deliverables_v1.0.doc Page 22 of 22