Metering market revolution
Interview with Chris Boek*, Chief Technology Officer, Metropolis Metering Services — speaker at Australian Utility Week 2015.
Q. In the past, metering services, including the rollout process, customer relationship management and meter asset management, have been managed by distributors in competition with outsourced metering service specialists such as Metropolis. The AEMC's rule change is designed to open up the metering market to new players to bring more competition to this space. It has said the rules will probably be implemented in mid-2017. Do you think the rules will work to achieve their objective?
We are already seeing electricity retailers develop new energy services and product offerings. The first tentative steps toward retailer-led smart meter deployments have been taken. And new metering service providers have entered the market.
The AEMC rule change process has created competitive certainty. The market is no longer concerned about mandates and monopolies. Part 8A of the Nationally Electricity Law has been repealed and we are able to focus on developing the market with confidence. We'd have to say that the AEMC has already achieved its objective.
Q. A few of the distributors in Victoria are about to set up dedicated metering service companies. Both AGL and Origin also have dedicated metering service companies. Do you think the metering service industry is well suited to these players?
The metering services industry is suited to any company that has a capability to deliver cost-effective and innovative metering and data management services. We are pleased to see the market open to competition among different services providers.
Q. Tell us a bit about your business?
Metropolis was accredited in 2006 as the first independent metering services provider operating in the National Electricity Market. Our focus has always been on meeting the needs of electricity retailers.
We own and operate a meter network that covers over three million square kilometres from far north Queensland to southern Tasmania, and from Ceduna in South Australia across to Mallacoota in Victoria, with 80% of our installed meter base servicing mass market customers. Metropolis is noted for having been the first metering services company to deploy residential smart meters in each state.
Q. A number of utilities are now outsourcing their metering services, which has created opportunities for companies like Metropolis. If retailers take on the metering coordinator role, presumably they would also outsource the servicing. What can they expect from the outsourcing deal?
Retailers have different perspectives on how to fulfil the metering coordinator role and each will, over the course of the next few years, determine what model best suits them. Outsourcing and insourcing are both reasonable options.
But regardless of which option they choose, retailers will always own the customer relationship and have the final say on what is and isn't appropriate for their business. An outsourced metering coordinator will always work in strong partnership with the retailer to achieve the retailer's objectives.
Q. Can you see entirely new players, such as telcos, entering the outsourcing market, assuming they were properly certified?
Any player that feels they have something to contribute is, and should be, free to enter the metering services market. It is ultimately up to the user of those services which provider or providers they choose to utilise and if more choice is available that can only lead to better market outcomes.
Q. What sort of feedback do customers give you regarding the meters? What are your views on the quality and functionality of smart meters being used around Australia? Have you noticed that metering managers are seeking new ways to differentiate their metering product and services from their competitors?
Customers don't care about meters. The best case outcome is that customers are completely unaware of the metering technology but totally engaged with the energy products and services enabled by them.
Metering asset managers understand that the available metering determines the range of energy products and services available. Basic metering means basic and indistinguishable energy products and services. Smart metering means smart and diversified energy products and services. We expect that retailers will increasingly demand product and service differentiation as the market moves away from basic metering.
The challenge for metering asset managers is to identify metering products that will satisfy future needs. Buying meters is much more than a purchasing decision. It's a long-term investment decision. The quality and functionality of the smart meters must be of the highest standard. But even more than that, meter suppliers must be prepared to work collaboratively with metering services providers, over the long term, to secure that investment.
Q. Do you have any input into AMI-related customer portals? I hear that they are generally not being used by customers.
Our experience is that customers do not engage with consumption data alone. Information needs to be easily digestible and action oriented. Tools, such as portals, need to analyse information for energy consumers and present the results, suggesting options on which they can act to achieve a desired outcome, such as lower prices.
Q. If you had three bits of advice for utilities that are preparing for a large-scale AMI rollout who want to avoid an expensive infrastructure rollout disaster, what would be top of mind?
The next few years are a period of discovery for electricity retailers as they learn to adapt to new ways of doing business. Firstly, we advise not to think in terms of large-scale rollouts, but to consider strategic deployments where it makes sense to provide selected customers with smart meters, either because it benefits the customer or the retail business, or both. Retailers will gain more knowledge and experience from well-considered, smaller, demographic deployments than from rolling out large numbers geographically.
Second, remember that customers with smart meters are immediately mobile. They can switch retailers within weeks if dissatisfied. Deploy smart meters to the right customers but in the wrong way and you will quickly lose them to your competitors. Customer engagement is essential.
Third, the metering services providers of tomorrow are being selected by your competitors today. As customers are acquired they will increasingly have smart meters serviced by different providers. Retailers must consider how new energy products and services will be consistently delivered in this environment to ensure customer satisfaction.
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