This submission reflects MCC Economics’ work in energy regulation and consultation analysis across multiple countries. MCC has advised regulators and government bodies including Ofgem, the Civil Aviation Authority and the UK government on energy policy and price controls, and this response applies that experience to Australia’s smart meter rules.

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What is a smart meter, and why does the rollout matter?

A smart meter is a digital energy meter that records how much electricity or gas a home uses, in detail and close to real time, and sends the readings automatically. That detail is what makes better pricing possible, for example cheaper rates at off-peak times, and it helps households manage their use and helps the grid balance supply and demand. The rollout matters because Australia’s energy system is changing, with more variable renewable generation and shifting demand, and smart meters are part of managing that. But rollouts are hard to get right, and doing it badly can raise costs or leave some consumers worse off, which is why the rules behind it matter.

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What trade-offs does the regulator need to balance?

Several, and getting them wrong in either direction causes problems. MCC highlights four. Consumer consent versus retailer flexibility, the tension between requiring clear consent before a tariff changes and letting retailers adapt prices freely. Flat tariffs versus cost-reflective pricing, where simple flat rates are easy to understand but miss the savings that time-based pricing can offer. Cost versus benefit, since the rollout adds costs for retailers that must be justified by real gains for consumers. And simplicity versus choice, offering a few clear options against a wider range that suits different needs but adds complexity. MCC notes that in the United Kingdom, long deliberation over pricing changes caused delays, a warning that balancing stability against innovation is genuinely difficult.

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Why does MCC think network companies might be better than retailers?

Because forcing retailers to lead the rollout takes heavy rules and oversight, and network companies may be a more natural fit. MCC’s view is that the regulator is introducing considerable overhead and prescription to push retailers into action, which raises a genuine question over whether they are the right body for the job. Network companies already own and manage the physical infrastructure, so rolling meters into their regulatory asset base, the pool of assets on which they earn a regulated return, could be a cleaner route. MCC does not demand this switch upfront. It suggests that if the retailer-led approach does not show early success, the regulator should seriously consider transferring the role to network companies. This is the submission’s most distinctive argument.

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How can the rollout protect and reward consumers?

By putting vulnerable consumers first and using the technology to give people real benefits, not just new tariffs. MCC argues the consumer focus should go further, with clear measures so that no one is disadvantaged, pointing to the United Kingdom’s targeted support for vulnerable consumers as a model. It also stresses that pricing reform should reward people rather than penalise them: in Finland, smart meter data has been used to give households personalised energy-saving advice, showing how the change can benefit consumers directly. And it argues technology and pricing should work together, citing Germany’s pairing of smart meters with electric-vehicle charging as an example of aligning the two to improve both consumer benefit and grid efficiency.

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Figure 1: The speed of smart meter installation across six countries, the proportion of meters installed from the start of each rollout (the source submission’s chart).

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References

1. ‍MCC Economics and Finance, submission on Accelerating Smart Meter Deployment, published by the AEMC, October 2024. The submission itself, as published on the regulator’s website: source of both quotations and the network companies argument, and confirmation of the October 2024 date.‍
2. Australian Energy Market Commission, Accelerating smart meter deployment rule change. The rule change project the submission responds to.

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PJ McCloskey

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Warwick Anderson

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