AER approves first sandbox trial waiver to help reduce network costs for NSW consumers

The Australian Energy Regulator (AER) has granted its first trial waiver through the Energy Innovation Toolkit to upgrade around 5,600 smart meters in parts of Greater Western Sydney, the Blue Mountains, the Southern Highlands and the Illawarra region of NSW.

Endeavour Energy has been granted the waiver to implement the trial that is expected to improve the delivery of load management services that reduce electricity consumption at peak periods and lower electricity network costs for consumers. The trial should also enable trial participants to access new and innovative energy services.

AER Chair Ms Clare Savage said enabling energy innovation will play an important role in delivering benefits to consumers through the energy transition.

“This is an important milestone in the AER’s regulatory sandboxing work, and I’m delighted to be able to announce our approval of this time-limited trial waiver for Endeavour Energy.

“The rollout of smart meter upgrades presents significant benefits for both consumers and industry. This trial can help consumers reduce their electricity bills through access to new products and tariffs, better integrated technology and improved understanding of their energy use,” Ms Savage said.

The trial was approved under new powers allowing a time-limited waiver from certain regulatory requirements through the Energy Innovation Toolkit, and is subject to a range of conditions including consumer protection measures, reporting requirements and other obligations.

Lessons learnt from Endeavour Energy’s trial will help the AER better understand the impacts of distribution businesses rolling out smart meters, as well as informing future sandboxing trials. The trial will last for 30 months and learnings will be shared publicly at the conclusion of the trial in 2025.

Also released today, the Energy Innovation Toolkit’s inaugural Year in Review revealed that 491 users have received assistance through the Regulation Navigator Tool and Innovation Enquiry Service in their first year, with the AER issuing 10 new pieces of guidance in response to the most-asked regulatory enquiries.

“Through the Energy Innovation Toolkit we are making it easier for innovators to launch their energy ideas and test new business models in a real-world environment, without risk of negatively disrupting the market.

“We are committed to providing regulatory frameworks that enable energy innovation and will continue to engage extensively with industry, energy stakeholders, policy makers and the broader community to share knowledge and support new ideas through the energy transition,” Ms Savage said.

Background

Energy Innovation Toolkit

The Energy Innovation Toolkit is led by the Australian Energy Regulator and supported by the Australian Energy Market Operator (AEMO), Australian Energy Market Commission (AEMC), the Essential Services Commission of Victoria (ESC), and the Australian Renewable Energy Agency (ARENA). The Toolkit forms part of the AER’s Regulatory Sandboxing function.

The National Energy Laws (being the National Electricity Law, the National Gas Law and the National Energy Retail Law) provide the AER a new power to grant waivers, enabling it to temporarily exempt innovative projects from specific rules.

Similarly, the AEMC is provided with a new power to temporarily change existing Rules or temporarily introduce a new Rule for a time-limited (temporary) period to allow a trial to go ahead.

In line with the Toolkit’s commitment to be a ‘first stop shop’, applications to both the AER for a trial waiver or to the AEMC for a trial Rule change are made through the Energy Innovation Toolkit website.

About the trial waiver

Under current arrangements, Distributed Network Service Providers like Endeavour Energy do not have a role in the upgrading of meters to smart meters. However, in certain circumstances, they can initiate metering replacements after giving notice when the meter is faulty.

Endeavour Energy sought a waiver from two provisions (clauses 7.8.10 and 7.8.6(a)(2) of the National Electricity Rules) to run a trial investigating enabling the issue of a Meter Fault Notice (MFN) to initiate the meter swap in circumstances where there is no genuine metering fault. New provisions in the National Energy Laws and Rules provide the AER with a function to grant such waivers to support innovation, knowledge-sharing, and more broadly, the energy transition.

The AER, in granting trial waivers can apply a range of conditions including consumer protection measures, reporting requirements and other obligations, to support the market while applicants are running their trial.

As a condition of the waiver, Endeavour Energy is required 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 Energy must also agree to allow the retailer to appoint any such nominated metering coordinators, provided that they can provide the services within the timeframes planned and for a price agreed between Endeavour and the retailer.

Endeavour Energy has appointed Intellihub as its metering coordinator to undertake these meter replacements.

AER media: 0466 409 921

Endeavour Energy media: 0409 664 608