Endeavour Energy Trial Waiver 2023 - Information for Consumers

Endeavour Energy (Endeavour) is a Distributed Network service provider in New South Wales. They own and maintain the electricity powerlines and power poles that carry electricity to houses and businesses in their distribution network.

Endeavour is conducting a trial involving the roll-out of smart meters to some residential customers across its network. The trial is focussed on residential customers that have a controlled load hot water system and are located in Marsden Park, Penrith, Westmead and Aerotropolis.
 
The Australian Energy Regulator granted a trial waiver to Endeavour under its Regulatory Sandbox function. The trial was granted because it is expected to enable Endeavour to target network congestion in a more cost-effective way, which is anticipated to result in reduced network costs for all consumers. The time period for the trial is 30 months (2.5 years) and it will involve approximately 5,600 smart meter upgrades.

Consumers can also benefit from smart meter technology which enables access to new and innovative tariff and Consumer Energy Resources (CER) technologies, as well as providing more information in relation to energy usage. 

Regulatory Sandboxing is a function established by the Australian Energy Regulator (AER). It supports energy innovators and start-ups in navigating complex regulatory frameworks and trialling new products and services that will deliver greater choice and cheaper energy options for consumers.

Regulatory Sandboxing includes a trial waiver function that allows the AER to grant a time-limited trial waiver for eligible trial projects. A trial waiver temporarily exempts an innovator from having to comply with specific laws or rules that may be acting as regulatory barriers to allowing an innovative trial to proceed.

Trial waivers facilitate trials for new approaches, services or models that may be in the long term interests of consumers but cannot be trialled under the current regulatory framework. These trials can provide evidence to support permanent changes to the rules to ensure they remain fit-for-purpose in serving the long-term interests of consumers.

A smart meter (also known as an advanced meter or 'type 4' meter) is a device that digitally measures your energy use. A smart meter measures when and how much electricity is used at your premises. It sends this information back to your energy retailer remotely, without your meter needing to be manually read.

Unlike accumulation meters, which can only keep a running total of the electricity consumed and must be read manually, smart meters record how much electricity is being consumed at regular intervals during the day. Smart meters also enable consumers to access tariffs that charge different rates for energy consumed at different times of the day, which can offer consumers more control over their energy costs.

Smart meters can also do other things remotely, like managing controlled load hot water systems, allowing the electricity supply to be remotely switched on and off without the need for a field technician, measuring the power quality at your premises and notifying your electricity distributor when the power goes out. You can read more about smart meters and download our ‘Smart Meters and You’ factsheet on the Australian Energy Regulator website.

A controlled load hot water system receives electricity on its own circuit and generally pulls large, steady amounts of electrical current at certain times of the day. This means that the ‘load’ (the power consumed by a user) is ‘controlled’ (receives power at specific times). Power drawn from the circuit during these periods can be billed at a cheaper rate, allowing consumers to save money if they use hot water at these times. Traditionally, load control was performed by a centralised load control network device operated by the distribution network service provider. However, load control can now also be managed by installing a smart meter at each premises.

Distribution network service providers like Endeavour Energy (Endeavour) are responsible for the operation and maintenance of the local electricity network that delivers energy to your premises. Distribution network service providers recover the costs for operating their network through network tariffs that are charged to your retailer and passed on to you through your electricity bills.

Endeavour have identified centralised load control devices on its network that are either at capacity and require expansion or need replacement. As many customers already have a smart meter installed which is capable of performing load control, the proportion of customers still relying on centralised load control devices for their hot water systems continues to reduce. This prompted Endeavour to consider the high costs associated with replacing centralised load control devices and whether a more cost effective solution could be found.
 
In this instance, Endeavour wishes to install smart meters for affected customers as a less costly alternative. Through this trial, Endeavour aims to demonstrate that significant cost savings can be achieved by installing smart meters, rather than replacing or repairing centralised load control devices.

The trial has been designed to maximise learnings such as efficiencies gained, reduced network costs, consumer experience and whether the model is scalable to a larger selection of consumers. These learnings will be shared with the industry and all other interested parties. A successful trial may also lead to the potential for a rule change which would enable all distributors to conduct the same project.

Under current arrangements, distribution network service providers like Endeavour Energy (Endeavour) do not have a role in the upgrading of meters to smart meters. In certain circumstances however, they can initiate metering replacements after giving notice where the meter is faulty. Endeavour sought to use this existing process to deliver smart meters in the absence of a genuine meter fault, in order to permanently retire or avoid installation of more expensive centralised load control for customers’ hot water systems.

To do this, Endeavour applied to the Australian Energy Regulator (AER) for a trial waiver from clauses 7.8.10 and 7.8.6(a)(2) of the National Electricity Rules (NER) enabling the issue of a Meter Fault Notice (MFN) to initiate the meter swap where there is no genuine metering fault. Endeavour has appointed Intellihub as its metering coordinator to undertake these meter replacements.
 
The AER considers the potential benefits and learnings to be gained from this project make it suitable as a trial and has granted a time-limited trial waiver from these two clauses of the NER to Endeavour. The trial waiver is granted subject to conditions and to the disclaimer attached to our decision.

Participants can benefit from the trial in several ways. Following the installation of a smart meter, you will have access to more retail tariffs including those with cheaper off-peak rates. You may have a more consistent hot water service as electricity is available to heat the water for longer periods each day. There will also be more capacity in your local network to host rooftop solar.

Smart meters provide you with access to more data about your electricity consumption. Being able to better understand and engage with your consumption can facilitate better informed decision making when considering your energy needs. Additionally, because smart meters can be read remotely, nobody needs to visit your property to conduct a meter reading.

There are also indirect benefits of the trial associated with more efficient use of the electricity distribution network, which are anticipated to lead to reduced network costs for all consumers. In addition to the trial’s potential to deliver network cost savings, we consider that receiving a smart meter paid for by the trial, that provides you with access to a range of benefits, means the trial has a reasonable prospect of giving rise to materially improved services and outcomes to consumers.

Smart meters have significant potential to increase benefits for consumers. However, it is also important to fully understand what this change will mean for you and how to best resolve any issues or concerns leading up to and following the change to a smart meter.

When we assessed Endeavour Energy’s (Endeavour) application, a key consideration was to make sure consumers are at the very least no worse off than they would be without this trial. The two main consumer risks we identified were around miscommunication or uncertainty around what this trial will mean for consumers, and genuine metering faults occurring during the trial.
 
We have developed trial conditions that consider these and other issues, to ensure we maximise the benefits to consumers, the learnings available to the market and mitigate any potential risks. The trial conditions allow for comprehensive opt out provisions and clarify that the waiver does not exempt metering providers from obligations to rectify genuine metering failures.
 
We have set expectations that retailers must at all times comply with all requirements relating to life support (including those set out in the National Energy Retail Rules) and will issue notices containing information that accords with best-practice recommendations developed in consultation with the Australian Energy Regulator (AER).

While Endeavour is conducting the trial, notifications about your power being interrupted and your meter being replaced are generally sent to you by your retailer. To ensure all consumers receive accurate information about the project, we set a condition requiring Endeavour to prepare a detailed customer notice about the project, which has been approved by the AER. The customer notice will be provided to retailers to assist them in contacting participating consumers about the trial, and the AER has set an expectation that retailers will adopt its recommendations and substantive drafting. The notice includes when you can expect your meter to be replaced, how to opt out of the trial, where to go for help, how to raise a concern or make a complaint, as well as contact details for Endeavour and the AER.

We are satisfied that with the conditions imposed, and Endeavour's agreement to comply with these conditions, consumers will have adequate consumer protections and robust avenues through which to raise concerns and have these addressed. 

A retail tariff is the way that you get charged for your energy. There are different types of electricity tariffs, including, single rate (flat rate regardless of when electricity is consumed) and time-of-use (variable rates depending on the time of day electricity used).

Time-of-use tariffs provide access to cheaper rates for consuming electricity outside of peak demand periods such as early evening when more electricity is being consumed than during the day.

In order to access time-of-use tariffs, your electricity meter must be capable of recording when you consumed the electricity. If your previous electricity meter was an accumulation meter and only able to keep a running total, you would not have been able to access these tariffs.

Your retailer will usually also charge you a daily supply charge, which may also be called a service charge (or service to property charge) or fixed charge. This is the cost of getting electricity to your home, even if you don't use any.

Will my retail tariffs change after I get a smart meter?

Depending on the contract you have with your retailer, you may be automatically moved to a time-of-use plan after your smart meter is installed.

So that you have ample time to decide what is best for your circumstances, you should contact your retailer to enquire about how retail tariff and plan prices may change, and what options will be available for you, after changing to a smart meter.   

You may also like to ‘shop around’ and compare different types of energy offers available in your area on our Energy Made Easy website.  

Yes, you can, but only before your meter is upgraded. A condition of the trial waiver we granted to Endeavour Energy (Endeavour) is that consumers must be able to opt out of participating in the trial. To make sure consumers have the best opportunity to maximise the benefits available, we have established a three step opt out process.

Step one 

When you first advise Endeavour that you wish to opt out, they will offer you the option to install the smart meter with the communications function disabled. This means you can still access more retail tariffs and get detailed information about your energy consumption patterns and help to identify potential cost savings, but the meter cannot send any data electronically and a person will still need to attend your property to read the meter.

Please note that you may be charged a fee for manually reading a smart meter. This is because costs to read your meter and to maintain the electricity network are normally built into your retail plan, which factors in your meter type when determining costs. For consumers with a smart meter, the network charges included in their retail plan are based on not needing to manually read the meter. If communications are disabled, your retail plan will still be based on having a smart meter, but depending on your retailer, they may list the cost to manually read your smart meter separately.

Step two

If you do not wish to have a smart meter with no communications function, Endeavour will offer to install a time switch near your current meter. The installation of a time switch will allow your hot water system to be operated independently (rather than by a centralised network device) which will enable Endeavour to continue ensuring your hot water is heating efficiently, but you will not have access to more retail tariffs or access to detailed information about your electricity consumption.

Step three

If you do not wish to have a time switch installed and don’t wish to participate in the trial at all, you can advise Endeavour that you are fully opting out of the trial.

Please note that the National Electricity Rules requires that all new and replacement meters be smart meters (with or without communications). This means that if you participate in the trial but change your mind after your smart meter is installed, your old meter cannot be reinstalled. Additionally, if you opt out of the trial altogether and your current meter develops a fault at a later date and requires replacement, it can only be replaced with a smart meter. You may also be required to pay for the replacement meter and installation costs.

If you have questions or concerns about the trial, in the first instance you should contact Endeavour Energy (Endeavour) directly. Endeavour can be contacted on 133 718.

The AER is actively monitoring the trial’s process to ensure it is progressing as intended and that consumers are not disadvantaged. A condition of the trial waiver requires that Endeavour provide details of any complaints about the trial to the AER within five business days, regardless of whether the complaint was resolved or not. The AER has the power to pause the trial, terminate the trial, or change the trial’s conditions should we have reason to do so.
 
If you believe that Endeavour has not met one of the conditions of their its waiver, and it is unable to resolve your concerns, we welcome you to contact the AER directly to discuss your concerns further. We also welcome consumers sharing their experience after participating in the trial and their experience with controlled load hot water systems in general. You can contact the AER by phone on 1300 585 165 or email to AERinquiry@aer.gov.au 

Need help with a different energy issue?

While the AER may be involved in disputes that arise as a result of this trial, other dispute resolution bodies exist to resolve general energy complaints. If you have concerns or complaints about another aspect of your electricity supply, that you are unable to resolve directly with your retailer, you could consider contact the Energy and Water Ombudsman of NSW (EWON) for assistance. EWON is a free independent dispute resolution service and can be contacted via their website or calling 1800 246 545.

The Australian Energy Regulator's (AER) Regulatory Sandboxing team will be actively monitoring the trial’s progress to ensure it continues to meet its objectives and monitoring the ongoing trial outcomes for consumers and the wider industry.

We will achieve this through robust reporting conditions that we have imposed on Endeavour Energy (Endeavour) as part of the trial waiver granted. Endeavour will provide detailed reports to the Regulatory Sandboxing team periodically and within specified time frames of specific events occurring. For example, we require Endeavour to notify us within five business days of any complaints they receive, regardless of whether they were able to resolve the complaint or not.

The AER has the power to monitor, pause or terminate the trial at any time, and to amend or impose additional conditions, should we choose to do so, to ensure the successful continued operation of the trial.

We welcome consumers to contact us directly to share their experience with the trial, as well as to raise any questions or concerns they may have.

Your electricity retailer is generally responsible for your metering and all new and replacement meters must be smart meters. If your current meter is faulty or at the end of its life and needs replacing, your retailer will arrange for it to be replaced with a smart meter.

Your retailer may also offer you a product that needs a smart meter installed and offer to install the smart meter for you free of charge. As the retail electricity market is effectively competitive, some retailers may offer you a smart meter free of charge if you agree to transfer to them.

Please note, if your current meter is functioning properly and not at the end of its life, your retailer does not have to replace it and may charge you for the new meter.

You can contact your electricity retailer and any other retailers to compare what offers are available in your location. Our independent price comparator website Energy Made Easy can also help you compare the available electricity offers in your local area.

We’ve provided an overview of the trial application process below. You can also read the full application and consultation process on our website here.

Application

On 27 February 2023 Endeavour Energy (Endeavour) lodged an application with the Australian Energy Regulator (AER) to conduct a trial involving the roll-out of smart meters to residential customers across Marsden Park, Penrith, Bawley Point, Aerotropolis and Westmead in New South Wales. Endeavour intends to install these meters to target network constraints in a cost-effective way utilising in-meter load control.

The trial proposed by Endeavour was initially for approximately 10,250 residential customers across Marsden Park, Penrith, Bawley Point, Aerotropolis and Westmead. This has since been reduced to a total of around 5,600 meters following an offer from one retailer (Origin) to appoint its own metering coordinator to do the works. Endeavour intends to install these meters to target network constraints in a cost-effective way by utilising in-meter load control. 

Consultation

The AER published a consultation paper in February 2023 seeking stakeholder comments on the application.

The AER received 6 submissions, and these offered mixed support for the trial, with the distribution network service providers the most supportive (see Attachment A for more details). Submissions in favour of the trial said it will help inform the deployment of smart meter technology alongside existing audio frequency load control capabilities and will support networks and enable connections of more Consumer Energy Resources. Retailers and metering coordinators were less supportive (excepting Intellihub), raising concerns as to how this trial would affect metering contestability.

Site Selection

Endeavour has proposed that Bawley Point be included within the scope of the trial and that it is also developing an islandable microgrid proposal for that area.

The AER notes however that customers in Bawley Point are currently on time switch controlled load. While time switches are not quite as responsive as smart meters, they do have the ability to deliver benefits to consumers through load control. As such, any change to smart meter technology would not deliver a similar magnitude in terms of cost savings and benefits that accrue to other locations. Given this, the AER has excluded Bawley Point from the trial waiver.
  
The AER considers the learnings or broader benefits to the market will not be reduced by excluding Bawley Point in this trial. It is possible that a subsequent trial waiver involving the broader proposed islandable microgrid at Bawley Point may permit the provision of more sophisticated smart meter installations, but on balance it is considered that this waiver is not the appropriate avenue for this project.

Decision

On balance, the AER considers the proposed trial likely to deliver an overall benefit to consumers and the industry more broadly and that it is appropriate to grant a trial waiver.

Conditions are requirements we can place on the trial proponent in relation to the trial. Expectations provide clarification to the trial proponent and impacted stakeholders on how they should engage with the trial.

The AER has imposed a number of conditions on Endeavour as part of the trial waiver.  These include conditions that impact:

• Opt out provisions. As a condition of the trial affected customers will be able to decline the installation of a type 4 smart meter and receive a non-communicating type 4A meter, a time switch, or to opt out of the trial and its associated meter upgrade entirely.  
• Genuine meter failures. We have set a condition ensuring that the waiver will not apply in the case of a genuine metering fault, which would be remedied under existing replacement provisions.   
• Competition. To ensure that the trial does not negatively impact the competitive market, we have included a condition requiring Endeavour to report to the AER on any request by a retailer of Trial Customers to engage metering coordinators appointed by those retailers via competitive processes. Endeavour must also agree to appoint these metering coordinators, provided they can provide services within the timeframes planned and for an amount agreed between Endeavour and participating retailers. 
• Trial Reporting. Endeavour must provide regular reports to the AER.
• The notice provided to customers. Endeavour must submit a draft of the notice to be provided by retailers to trial customers to the AER for our approval, prior to the granting of such notice. The notice will contain key information about the trial, including opt out provisions, contact details for Endeavour, times and dates for metering swaps, and additional information for life support customers. The notice will also include a link to a web page hosted by the AER containing a fuller discussion of the trial’s risks, benefits, the role of the AER in administering the trial, and how to contact the AER to discuss complaints or trial experience directly. Additionally, the notice will discuss the potential for some customers to access time of use tariffs and will include a link to the Energy Made Easy guide to tariffs. The AER expects retailers to adopt the substantive drafting of the notice.

We have also included expectations for Endeavour and participating retailers in regard to customer engagement and life support customer support, to protect consumers and the energy network. This includes complying with life support provisions out under the National Energy Retail Rules cl. 124B(1) and cl. 124B(2). The AER reserves all powers to take enforcement action against any breaches of existing notice and life support provisions not expressly covered by the waiver.