Utility Meters and Trade Measurement Regulation

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Utility MetersandTrade Measurement Regulation
11/11/2009
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Agenda
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Geoff BrowneDeputy DirectorConsumer Affairs
Victoria
11/11/2009
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Paul MyersGeneral ManagerConsumer
PolicyConsumer Affairs Victoria
11/11/2009
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Regulatory Framework Complexity

• Current future MCE MCCA processes

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Developments in Industry

• Changes to National Regulation
• COAG Regulatory Reform
• Australian Energy Market Commission
• Responsible for rule-making market development
• Australian Energy Regulator
• Responsible for economic regulation of energy
  market
• Victoria leading in implementation of agenda

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ESC Price Reviews

• Electricity
• 5 years
• Effective 1 January 2006
• Gas
• 5 years
• Effective 1 January 2003
• Work underway for next review effective 1 January
  2008
• Water
• 3 years
• Effective 1 July 2005

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The trade measurement system James
LathamSenior Policy AdviserConsumer Policy
11/11/2009
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Trade Measurement System

• Under the Constitution the Commonwealth has
  responsibility for trade measurement
• Section 51. The Parliament shall ... have power
  to make laws with respect to- (xv.) Weights
  and measures
• Commonwealth, however has limited its role in
  legislation
• States have role in administration

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Objectives

• Commonwealth Act objectives
• Establish national system of standard measures of
  physical quantity
• Coordinate national system of measurement
• Bring about use of metric as sole measure

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Objectives

• State Act objective
• To enact uniform trade measurement legislation in
  Victoria
• Ensure correct measurement of goods sold by
  measurement
• Provides benefits to industry
• International trade benefits
• Consumer benefits

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Legislative framework

• Commonwealth
• National Measurement Act 1960
• National Measurement Regulations 1999
• Victoria
• Trade Measurement Act 1995
• Trade Measurement Administration Act 1995
• Trade Measurement Regulations 1995
• Harmonisation through Uniform Trade Measurement
  Legislation (UTML)
• Note utility meters have separate legislative
  component

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Commonwealth role

• Pattern approval
• Development of design acceptance guidelines for
  measuring instruments
• Pattern approval for manufacturers or importers
  of new instruments, approving the design of new
  instruments
• Coordination, with states, of testing procedures
• Coordination of national policy

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State role

• Set legislative framework (illegal to use a
  measuring instrument unless it is certified by
  licensee or verified by an inspector appointed by
  the State)
• Set testing guidelines
• Appoint licensees and inspectors
• Design and control inspection system
• Raise funds to pay for testing regime

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Hierarchy of standards
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Top to bottom process
National Measurement Act 1960
This is the design acceptance guidelines used by
the NMI to determine if an instrument is suitable
to be used for trade
Pattern Approval Design Document
Manufacturers or importers of instruments submit
new designs for approval by the NMI. Local and
overseas test data may be required by the NMI
before approval is granted
Pattern Approval
It is illegal to use a measuring instrument for
trade use unless it has been certified by a
licensee or the employee of a licensee appointed
by State Trade Measurement Authorities.
Instruments installed for use
State Trade Measurement Authorities
Companies or individuals, commonly manufacturers
or importers are appointed as Licensees under
Section 44 of the Trade Measurement Act, to
certify instruments
Appointment of Licensees
Trade Measurement Act 1995
Certifiers employed by Licensees and registered
with CAV will inspect and test instruments to
ensure conformance with the approved pattern and
compliance with required accuracy standards, and
then certify them in accordance with Section 14
of the Trade Measurement Act
Certification of Instruments
In-Service Compliance Tests
Authorised Officers appointed by CAV inspect and
test trade instruments which have been certified
to ensure they comply with performance standards
and to audit the work of certifiers.
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Types of instruments
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Compliance roles

• Licensees
• Generally manufacturers or suppliers of trade
  measurement instruments
• Certifiers
• Employees of licensees
• Approved to certify
• Large quantity

• Inspectors
• Check certified instruments
• Regionally based
• Risk based compliance regime
• Contracted by CAV

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Other functions

• Pre-packaged goods
• Licensing of operators of public weighbridges and
  register weighbridges
• Inspectors also undertake other compliance
  functions (motor car traders, travel agents and
  product safety)
• State runs State Primary Standard. Run under
  contract by ADI at Footscray.

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Funding
Appropriations from govt
Licence fees
Approve licensees
Licensees and certifiers
CAV policy and operations
Appoints and controls inspectors
Fee payable for certification
Contract payments for inspectors
Risk based inspections
Users of trade measurement instruments
Inspectors
Costs covered by fees and appropriations
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Terminology

• Verification Power to do so when an instrument
  is new. Done by a verifying authority
  (Commonwealth function).
• Re-verification When an instrument is reverified
  (ie when some change occurs), done by an
  inspector.
• Certification performed by persons licensed to
  the State.
• Certification audit done by inspectors.

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Utility MetersandTrade Measurement
RegulationCaroline Hawkless
11/11/2009
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Agenda

• What is the Regulatory Problem?
• Current Regulatory Framework for Utility Metering
• Current Trade Measurement Regulatory Framework
• Proposed Role of CAV in Utility Meter Regulation
• Options for Future Regulations addressing Utility
  Metering
• Feedback / Questions
• Next Steps

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What is the Regulatory Problem?

• Risk of unfair trade arising from inaccurate
  metersleading to winners and losers.
• Meters unable to be 100 accurate 100 of the
  time.
• Some reasons for inaccuracy are uncontrollable,
  e.g Impact of natural environment Technical
  design characteristics.
• Need to establish tolerances to cater for the
  uncontrollable inaccuracy through the
  establishment of maximum permissible errors (mpe)
  which vary according to the value of the metered
  commodity.
• As mpes become more stringent the price of the
  meter rises.
• Utilities need to establish procedures that
  ensure the ongoing accuracy of meters within the
  mpe limits.

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Current Regulatory Framework Gas (1.5m)

• Gas Distributors must obtain a Gas Distributor
  licence and comply with the minimum standards
  contained in the Gas Distribution System Code
  (GDSC).
• Energy Retail Code requires retailers (person
  who holds a retail licence under the Electricity
  Act or Gas Act) to bill customers based on meter
  readings.
• The GDSC requires the Gas Distributor to
• install a metering installation to provide
  metering data for billing purposes.
• Ensure the metering installation complies with
  the error limits.
• Perform acceptance testing, type testing and
  testing on request.
• Prepare a sampling plan to test a meter family at
  least once in its initial 15 year life and at
  least once in each subsequent year.

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Current Regulatory Framework Electricity (2.2m)

• Electricity Distributors must obtain a
  distribution licence and Electricity Retailers
  must obtain a retail licence and comply with the
  Electricity Customer Metering Code (ECMC) 1st
  tier customers only.
• The Energy Retail Code requires retailers
  (person who holds a retail licence under the
  Electricity Act or Gas Act) to bill customers
  based on meter readings.
• The ECMC requires the retailer and/or distributor
  to
• Install a metering installation to provide
  metering data for billing purposes.
• Ensure the metering installation complies with
  minimum standards.
• Ensure the meter equipment is tested to ensure it
  meets minimum accuracy requirements.
• Prepare an asset management plan for metering
  equipment.
• Inspect metering installations in accordance with
  specified timeframes.

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Current Regulatory Framework Water (2m)

• Melbourne Water Corporation is responsible for
  the collection, storage and wholesale selling of
  Melbournes water.
• Three retail water and sewerage companies are
• - City West Water - CBD, Richmond and western
  Melbourne.
• - South East Water - south eastern Melbourne,
  Dandenong ranges and the Mornington Peninsula.
• - Yarra Valley Water - eastern and north eastern
  Melbourne, the Yarra Valley and Healesville.
• Regional Victoria is served by fifteen regional
  urban water authorities.
• All are responsible for water meters and meter
  accuracy.
• For metropolitan customers, water charters deals
  with meter testing requested by the customer and
  disputes.
• For non-metro urban rural customers, the Water
  Act and Regulations deal with meter testing
  requested by the customer and dispute procedures.
  

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Current National Uniform Trade Measurement
Regulatory Framework

• The Commonwealth (represented by the National
  Measurement Institute (NMI) within the Dept of
  Industry, Tourism and Resources) has primary
  responsibility for trade measurement through the
  National Measurement Act 1960 including
• Design Criteria and Pattern Approval
• Initial Verification
• Setting Standards, e.g. maximum permissible
  errors for verification.
• The States Territories have responsibility for
• Re-verification
• Ensuring replacement of non-compliant instruments
• Complaints handling

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Status of Exemptions Implementation within
Victoria

• Currently gas, electricity and certain water
  meters are exempt from the operation of the NMA.
• The timetable for further lifting of exemptions
  will likely proceed with water in 2006, then
  electricity in early 2007 and ultimately gas by
  late 2007.
• Following privatisation of the Utility industry,
  Victoria developed its own legislation
  anticipating the removal of the exemptions.
• The Victorian legislation is the Utility Meters
  (Metrological Controls) Act 2002 (UMA) but will
  not apply to Utility industry until regulations
  are made that include a prescribed date of
  commencement.
• A range of meter instruments are pattern
  approved by the NMI already, however until
  exemptions are lifted the utility businesses are
  not obliged to adopt them. No approvals have been
  issued for gas meters to date.

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What is being Proposed?

• Intended role of Consumer Affairs Victoria
• Transfer responsibility for utility meter
  regulation from the ESC to CAV.
• CAV to make Utility Metering Regulations in
  accordance with the UMA.
• CAV to undertake re-verification inspection
  activities and may set the periods within which
  utility meters are certified.
• CAV to undertake complaint handling.

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Approach to the Development of Regulations

• Status Quo - Continue with various Code
  requirements and testing plans already in place
  with CAV to adopt ESC approach to enforcement.
• Regulations - CAV to commence development of
  tailored regulations for each industry in
  accordance with the UMA with a focus on
• General - Assessment of those meters most likely
  to be inaccurate
• Water CAV will develop an inspection program to
  test water meters since pattern approvals for a
  range of instruments have already been issued and
  certain exemptions lifted
• Electricity - CAV will consult with stakeholders
  in the electricity industry on options for
  application of the UMA to this industry.
• Gas CAV will continue to consult with industry
  as pattern approvals are made with a view to
  developing regulations in anticipation of the
  exemptions being lifted by NMI

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Information Needs

• Current compliance costs to industry
• Salary and on-costs of staff/contractor resources
  devoted to meter testing.
• Number of accuracy tests conducted per annum.
• Proportion of meters tested per annum.
• Meter maintenance and replacement expenditure per
  annum.
• Current meter accuracy test results.
• Over charge or under charge dollar estimates per
  annum.

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Questions
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What next?

• Seek information from stakeholders as requested.
• Seek submissions on the proposed utility metering
  regulatory approach and its impacts.
• Submissions should be in writing and made by
  email to
• utility.consultations_at_justice.vic.gov.au
• or by mail to
• Utility Consultations Consumer Policy BranchGPO
  Box 123A Melbourne VIC 3001
• Submissions should be received no later than 18
  August 2006.
• Preparation of draft regulations and a regulatory
  impact statement following.