There should be an overhaul of metering arrangements in the electricity market, as part of a broader series of measures aimed at stemming rising prices, according to the Australian Energy Market Commission.
Buried in its 192-page Power of Choice report yesterday are measures intended to open up the metering market, which will play a key part in opening the door to rolling back power prices.
"Reforms to the present metering arrangements are necessary to promote investment in better metering technology and consumer choice," the commission said.
"We have put forward a model where metering services are open to competition and can be provided to residential and small business consumers by any approved metering service provider."
It is the most overlooked "appliance" in the family home, but allowing competition in metering services may be the key in opening the market to more active pricing competition.
Recent New Zealand analysis shows that Victorians, for example, pay four times what New Zealanders pay for metering services. The difference is that New Zealand has competition, Victoria does not. As a result, metering services have become a "nice little earner" for distribution companies.
You may think the cost of metering services is small, but in Victoria it is twice the cost of "green schemes", for example, which have been blamed for much of the rise in power prices, and about 40 per cent of the cost of the underlying electricity itself.
According to a recent analysis by NZ infrastructure investor Infratil - which also produces and sells electricity in Australia - in New Zealand, the meter may be owned by the power distributor, the retailer, or someone else entirely.
The household's retailer pays a fee to use the meter (if they don't own it), perhaps $NZ50 a year for an old-style one and $NZ75 a year for one that can be remotely read.
But in Victoria the direct cost is as much as $NZ220 per household for smart meters, for no benefit so far, since power companies have only just begun rolling out new services taking advantage of the smart meters that have been installed.
"It is an important step in producing an innovative pricing structure," AEMC chairman John Pierce said. "Unless there is metering competition we won't see market innovation."