Regulation of smart meters ruled out

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Energy Minister Gerry Brownlee has rejected calls to regulate the installation of new "smart meters" in homes.

He said yesterday that he had agreed to the Electricity Commission's recommendation not to regulate the meters because the benefits would not outweigh the costs.

Power companies including Meridian Energy, Genesis Energy and Contact Energy are installing smart meters in homes throughout the country. Smart meters can be read remotely so companies do not need to send contractors out to read meters. They can also digitally record and display power use.

Retailers say the meters will be installed at about 80 per cent of New Zealand's almost two million meter sites by the end of 2013. They say the changes will save customers money and help reduce energy use.

But some customers claim their bills have increased since the meters were installed.

The Parliamentary Commissioner for the Environment and Grey Power have called for a moratorium on installation, saying power companies were rushing to install the meters to make money from customers who were previously undercharged.

Meridian has confirmed 4500 Christchurch customers had been sent letters advising them their tariffs would rise after they had smart meters installed, as they had been undercharged previously.

The new meters are also being installed without a home area network (HAN) smart chip that would allow them to communicate with other energy-efficient devices in homes, prompting commissioner Jan Wright to label them "dumb meters". Some Australian states and the European Union have regulated the introduction of smart meters, but Mr Brownlee said he hadn't been persuaded it was a good idea.

New Zealand's electricity market was different from other countries, and already had a ripple-control system on water heating to manage peak load, Mr Brownlee said.

Also, smart-meter technology was not fully developed and could become obsolete, adding to costs for consumers. Appliances that "talked" to smart meters were probably 10 years away, he said.

"What this means is consumers would have to pay for a technology they would not benefit from for some years, with a real risk the installed technology may become obsolete and have to be replaced (at additional cost) during that time.

"There's no doubt that smart meters are the way of the future and this government is committed to the roll-out of smart meters in New Zealand. However, we are not going to regulate when the costs ... outweigh the benefits, and regulation will create costs to the consumer."

Charles Chauvel, Labour's energy spokesman, said Mr Brownlee's decision was a lost opportunity for the Government to set standards in a rapidly evolving industry.

"My fear is that by waiting we're going to force consumers to spend more money in the long run when this new technology comes of age ... requiring the installation of a HAN would put the onus on appliance manufacturers to start making smart, energy-efficient devices."

- © Fairfax NZ News