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GRC Professional : GRC Summer 2013
25 point to the fact that privately ow ned network businesses have fewer conflicting objectives and more efficiently meet the long-term interests of their consumers. "We need to get the setting of reliability standards out of the hands of state governments, where it still sits, and put it into the hands of the central rule-setter and referee, that is the Australian Energy Market Commission and the AER," Wood says. "We also have to make sure that the state- owned businesses are at least as efficient as the privately-owned businesses. "We need to make the overall system more responsive to market changes. Instead of energy demand rising steadily, it has actually been falling for the last couple of years. That means that if you've been merrily spending capital and investing on the basis of a rising market, but the market is falling, then you're over-investing. "If this was a non-regulated, competitive m arket you might say bad luck; you spent too much money and your customers aren't going to buy your products any more. But this is a regulated business in which the costs of investment are passed on to the consumers. Clearly that is a problem. The system needs to be much more responsive to what's happening in the m arket." ••• Research shows us that most customers are more interested in reliability than savings if the other option is time without power. Harnessing costs with technology Smart electricity meters allow consumers to monitor the cost of power they use and work out the cheap- est time to use it. But for power suppliers, assuring consumers that their meters are safe, optimally efficient, durable, installed with prescribed technical standards and will produce those longed-for savings, is another matter. As external contractors supply meters for installers, the issue for power suppliers is assuring that the meters that measure the power used meet high standards and will not cost extra money for consumers in the long run with costly repairs and with frequent auditing to prevent failure. This was the conundrum facing Citipower and Powercor Australia when the state decided to roll out smart meters to all electricity consumers from 2007. Testing such vast numbers of meters was expensive and impractical, so Compliance Master International developed software based on the internationally recognised "acceptance sampling by attributes methods for achieving specified compliance targets". Experts developed a suitable acceptance quality limit (AQL) for each risk category so the optimal number of smart meter installations could be randomly audited. The total number of non-compliances found for each risk category was compared with a predetermined acceptance number to decide whether the specified AQL was exceeded. Those that failed targets were rejected. During the first two years of the meter rollout, 21,400 audits using this system found 20 per cent exceeded one or more risk categories and were rejected. A re-evaluation to a "critical" risk rating was done after loose cable connections caused some failures.
GRC Spring 2012
GRC Autumn 2013