Distributors may be key to multiple trading relationships

Caption: Simultaneous Data Delivery to Multiple Destinations

Distributors could be key to enabling consumers to have multiple trading relationships with different energy service providers, technology innovator GoodMeasure suggests. It suggests the growth of solar consumer-generators and people using electric vehicle-to-grid technology will open opportunities for multiple parties to provide services to a single customer. But enabling that will require “more sweeping” changes than the Electricity Authority has suggested, including to the “fundamental” relationship between distributors and consumers. It says the pass-through of distribution charges in a single retail bill when different services try to split-charge their share through “some arbitrary scheme” is “folly.” The authority has been investigating ways to support innovative technology-based business models by enabling consumers to establish trading relationships with multiple electricity services from one ICP. That would avoid the need to install additional meters. It believes the change will encourage further innovation in consumer services such as price-comparison websites, home energy management systems, peer-to-peer generation trading, demand-response and aggregation services. GoodMeasure, which is 36 per cent owned by King Country distributor The Lines Company, says if other networks followed that firm’s direct billing example consumers would be “free to have as many retailers as they wish”. “Billing has never been so cheap and simple to manage. Many smaller operations can send regular bills to consumers, for only a few cents a month.”

Active role

The authority received 28 submissions on its November consultation paper on enabling multiple trading relationships. It may task the industry’s Innovation and Participation Advisory Group to consider the issue as part of its workplan.   GoodMeasure says the industry will be better prepared for future technology developments if distributors take a more active role sooner. The cloud-based, behind-the-meter electricity monitoring firm – led by energy entrepreneurs Dean Gowans and Regan Ryan – expects there will be “reluctance” from the “largest, most powerful players” who are at ease with the status quo. It suggests a multiple trading system be brought up alongside the existing framework, similar to having analogue metering technology continuing to exist alongside smart meters. Consumers would drive the transition by “selecting progressive retailers” which swiftly embrace new applications, it says. It says distributors are best placed to overcome some of the challenges to multiple trading relationships. They should deal with connections and disconnections and also medically dependent and vulnerable consumers – an obligation which GoodMeasure says should have always been with that industry.

Consumer benefit

GoodMeasure believes consumers will benefit whether or not they participate in multiple trading relationships. “The threat of it will push retailers to lift their game.” It suggests consumer services from metering providers would also improve. “Currently, most MEPs contract with the retailer. Many of the problems highlighted in the consultation paper are due to the cosy nature of this arrangement.” Metering firms aren’t currently incentivised to provide more than what their retailer requires and their contracts also try to ensure installed assets “cannot easily be superseded”. As a result consumers are receiving minimal value from their smart meters which should be clearly identified as a constraint. GoodMeasure also calls for distributors’ load-control to be opened up in the same manner as access to metering data. “Retailers could bid for the use of the load control, or better still, the consumer could participate in dynamic markets where the use of load control would be given to the highest bidder for a half hour period.”

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Credits: The Article “Distributors may be key to multiple trading relationships”, written by Felicity Wolfe was originally published on ENERGY NEWS on Thursday, 05 April 2018.

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