On February 26 2011 the government issued an act amending the Electricity Act 1998 and the Gas Act to improve market operations. The new act (re)introduces regulation of the metering market and introduces smart metering.
The metering market had been considered a liberalised market for the past 10 years. However, market surveys showed that the market was not functioning effectively, and that the prices of metering services were not subject to efficient competition.
The new act further expands the statutory tasks of network operators. Network operators are under a statutory obligation to ensure that small end users(1) have metering equipment installed for each electricity and gas connection, and to provide operation and maintenance services for such equipment. This activity is exclusive to the network operator and, as there is no competition in this market, the tariffs for such services shall be regulated in a manner comparable to the regulated tariffs for connection and transport. Tariffs shall linked to the efficient costs of such services.
In respect of large end users, network operators must provide metering equipment at the request of the customer. Here, the network operator has no exclusivity and it must enter into competition with other parties that offer metering equipment and related services.
The new act provides for the introduction of smart meters. A smart meter is a meter that can be controlled and read from a distance. Smart meters allow customers more insight into their energy consumption and may help to encourage energy saving measures.
Smart meters will be rolled out to small end users gradually. The network operator must provide a smart meter:
- at the request of such customers;
- when an existing metering device is replaced;
- when a new connection is made for a newly constructed building; or
- when an existing building is renovated.
The act provides for an opt-out possibility, which enables consumers either to refuse a smart meter or to 'un-smart' the smart meter. The latter possibility effectively means that the smart meter cannot be read from a distance and shall function as a regular meter.
Furthermore, the act limits the frequency at which network operators may read smart meters. Continuous or daily data flows are not allowed. Network operators can collect the metering data only:
- annually for the purpose of the annual invoice;
- at the occasion of a relocation or change of supplier;
- every two months to monitor energy usage; or
- to the extent necessary for the proper technical operation of the network.
A higher frequency is allowed only with the explicit consent of the customer, which can be revoked.
The act has been pending before Parliament for almost four years. The delay was largely caused by concerns raised in the First Chamber in relation to smart meter privacy issues. However, as the bill had already passed the Second Chamber, amendments to the bill were no longer possible. This issue will be resolved by issuing a new amending act to amend the already accepted act from the moment that it enters into force. This is expected to take place on July 1 2011.
For further information please contact Max Oosterhuis or Roland de Vlam at Loyens & Loeff NV by telephone (+31 20 578 5785), fax (+31 20 578 5800) or email ([email protected] or [email protected]).
Endnotes
(1) Electricity maximum – 3x80A; gas maximum – 40 cubic metres an hour.