Breaking News: eBay, Trading Post help catch tax cheats

ZDNet / Smart Meter / Story

Vic audit slams smart meter roll-out

By Suzanne Tindal, ZDNet.com.au on November 11th, 2009

Topics

smart meter, victoria, audit, roll-out, electricity

Top related stories

UXC, Bilfinger score smart meter deal

Govt releases $100m Smart Grid tender

SP AusNet names smart meter suppliers

Trials carried out on the technology for Victoria's massive smart meter roll-out failed to provide "reasonable assurance" on its viability, according to the Victorian Auditor-General in a report slamming the project.

(Power trip image by mugley, CC2.0)

Victoria planned to have meters rolled out to 680,000 customers by 2013, with the major electricity players already announcing partners including UXC, Accenture, GE, Motorola, Unwired and Logica. Costs for the roll-out would be recovered via increased prices for consumers.

Yet the Auditor-General Des Pearson wasn't convinced that the technologies the industry is preparing to roll out was going to work in practice, after trials which he believed were badly handled.

"For six of the 11 technology candidates that actually completed the trials process, all technologies were assessed as requiring further technical development," his report said. "The generally poor showing of [technologies] under trial raises issues about an unexplained anomaly, namely why the commitment to the [roll-out] continued to be recommended, or at least why the technical vulnerabilities were not explained in any great detail in the advice."

The auditor-general believed that some of the technologies were so immature as to not have warranted extensive testing. According to the state's Department of Primary Industries, which has oversight of the project, the testing cost the Victorian Government $6 million.

In addition, the trials weren't carried out properly, according to the report. "The [trials working group] had difficulty developing criteria for the department-sponsored trial to the extent that it agreed that '...success criteria should only be identified and described in broad terms until further results of trials/testing are known'. In fact, the trials' success criteria were not agreed until four months after the trials started," the report said.

The test procedures couldn't show if the technology met the requirements, the auditor-general continued, with assessment approaches not representing mature practice. Also, an inadequate number of staff had been allocated to the project, the auditor said, leading to a distinct lack of documentation.

The auditor-general admitted that there had been additional trials carried out in 2008 and 2009, but said there was no documentation for those trials. The report recommended that the department obtain assurances "without delay" from the electricity retailers that the technology is capable of delivering functionality.

The Department of Primary Industries wasn't happy. "We find the report disappointing and of more limited value to the [project] than we had hoped," the response ran. It said that the industry had incentives to make sure its technology worked and the government becoming involved would only expose it to risk. The response also pointed out that one technology had performed in trials.

The auditor-general refuted that the department shouldn't become involved because it might gather risk to itself, saying that the department should be more than an observer in the project. "It is a truism in the public sector that while responsibility can be delegated, full accountability for achieving intended outcomes cannot be," he said.

Technology wasn't the only problem the auditor-general found with the program. "The [project] has not used the checks and balances that would ordinarily apply to a major investment directly funded by the state," the report said. "There have been significant inadequacies in the advice and recommendations provided to government on the roll-out."

It pulled apart the economic cost-benefit analysis, saying assumptions were false and that benefits might not be as high as believed. The auditor-general also believed that consumers would have to pay more than the department's estimate of $40 to $50 a year in metering costs. According to the report, one retailer recently said the costs could be as high as $100 to $150 per year.

"In order for consumers to benefit from the cost savings [incurred by the distributors], the distributors will need to pass on the savings through to retailers who will need to pass on the savings subsequently to consumers. If this doesn't happen, then the benefits may not accrue to consumers who then ultimately fund the implementation costs," the report said.

The department countered that competition and regulation could keep cost rises in check and argued that the report did not consider that the benefits to consumers would not only come from cost reductions but also from service improvements. It warned the auditors of taking studies carried out by stakeholders at face value.

The report recommended that the department carry out a new cost-benefit analysis, that it commission a review by the Department of Treasury and Finance on the project, that it use risk management guidelines, talk more with stakeholders and engage the regulator. The department agreed in principle with the recommendations, but not for the reasons the auditor gave.

Related stories

UXC, Bilfinger score smart meter deal

Govt releases $100m Smart Grid tender

SP AusNet names smart meter suppliers

Western Power flags smart meter roll-out

Country Energy unsure on smart meter timing

Vic to beat NSW to smart meters

Talkback

680,000 customers what a waist of time...

So much money and only 680,000 customers - thats a waste of time and money, roll-out to all customers even if only progressivly.
Suzanne, the figure of 680,000 customers is this correct?

I don't believe so as the industry is expected to rollout AMI meters to all premises that consume below 160MWh p.a. by 2013.
That would be somewhere in the range of at least 1.5 million customers surely.

AnnonomousAnnonomous November 13th, 2009
Report offensive content Reply (0) (0)

Smart meters

The exchange of new 'smart' meters will remove the concessional electricity rate previously applicable to overnight hot water systems and increase tariffs by up to 50%

AnonymousAnonymous November 14th, 2009
Report offensive content Reply (0) (0)

Get real, if it was only 50% it would be great

My peak rate went from 12.8c/Kwh to 32.4c/Kwh (155%increase)
at Maitland NSW when smartmetres were Installed a few months ago. Peak is now from 2:00PM to 8:00PM. Sholder is from 6AM to 2PM and 8PM to 10PM at 12.7c/Kwh, the rest is off peak, all usage, not just hot water, at approx 7.6c/Kwh. The daily access charge and off peak rate have both gone up by approx 25%. Just waiting dot Rudd's ETS rise if the ETS gets off the groung. (it will only be around 5%, just ask Rudd)

AnonymousAnonymous December 14th, 2009
Report offensive content Reply (0) (0)
Add your opinion

In order to post a comment, you need to be registered. (Sign In or register below)

Post your comment

Power Centre Useful content from our premier sponsors

Resource Centre Useful content from our premier sponsors

ZDNet Australia Live

A user from Brisbane measured 17103kbps @ Broadband Speedtest.

8 minutes ago, Click here to find out how fast your internet speed is.

US govt sues Oracle http://itrau.com/cDxM90 via @ZDNetAustralia

Top 25 Android apps: The best of the best http://tinyurl.com/25tvcel

tip @techmeme @scepticgeek ZDNet headline: BlackBerry encryption 'too secure': National security vs. consumer privacy http://zd.net/daRQHJ

@jfp Experience noted! Like at ZDNet, the salary is good (very good) - but it's not my main objective :) Writing, representing, engaging! :)

SQL Server is one of Microsoft's 8 core businesses. http://bit.ly/bPd8kV #TnSqlDc #sqlp****

RT: @ZDNet: Court rejects class action status for Intel antitrust suit http://zd.net/dyhmnc

First impressions of Apple's refreshed desktop lineup http://bit.ly/cFScu9

zdnet: Court rejects class action status for Intel antitrust suit - http://bit.ly/9QtyIw

RT: @ZDNet: Real cuts losses amid restructuring, still misses analyst estimates http://zd.net/a5VrGg

Top 25 Android apps: The best of the best: TED is a fascinating event that features a meeting of the minds of some... http://bit.ly/dnBx1F

RT: @ZDNet: McAfee acquires tenCube; Second quarter mixed bag http://zd.net/9NpzpY

Research: Google reaches malware milestone, while 'true' Twitter users increase - ZDNet (blog) http://url4.eu/6ZLjb

Research: Google reaches malware milestone, while 'true' Twitter users increase - ZDNet (blog) http://url4.eu/6ZLjZ

http://www.zdnet.com/blog/microsoft/microsoft-we-are-focusing-on-eight-core-businesses/6937 focusing on eight anything doesn't sound right

RT @superglaze: A photo-gallery report of #ORGCon, featuring @doctorow @newsbrooke @thepublicdomain and more! http://bit.ly/dbkP7n #acta #deact

Court rejects class action status for Intel antitrust suit http://bit.ly/bZUp31

Apple unveils Safari Extensions Gallery for extensions, updates for security http://zd.net/aSFW2b (via @ZDNet)

http://bit.ly/dnVmvs Aurora opens Small Business Server to the cloud | Servers | ZDNet UK

Court rejects class action status for Intel antitrust suit | ZDNet http://shrten.com/4klr

RT @HeathClancy: EPA: Yup, greenhouse gases still unhealthy http://bit.ly/aZkizM #greentech #green

http://bit.ly/9SnE7Q Database Toolbar Icons - Free Software Downloads - ZDNet Asia

ZDNET: Court rejects class action status for Intel antitrust suit http://bit.ly/9yAlXu

RT: @ZDNet: HP announces a containerized datacenter sale http://zd.net/d47SR2

RT: @ZDNet: Steve Ballmer: Microsoft has been focusing on cloud for 15 years http://zd.net/9cv0US

RT @johandenhaan: Nice example of difficulties of release management: Oracle rebrands Java, breaks Eclipse http://bit.ly/aN1jaI #yam #fun

There are a couple of points in the story where David's digs at Telstra are offmark: firstly, an inference that the current broadband...

32 minutes ago by gromit on Is Telstra the scorpion or the frog?

David, you've completely missed the point. This has nothing to do with consumer value. You mentioned that "Telstra is supposed...

48 minutes ago by M.N.M on Is Telstra the scorpion or the frog?

Yup! They're pretty and look real nice but, as one who qualified in 1963 - on a Diesel Boat - and retired in 1982 - after 6 more die...

51 minutes ago by willyjon on Get wet with submarine tech photos

MasterChefs launch iPhone 4 in Sydney - http://dld.bz/prSR I really want 1, would you get 1? http://dld.bz/prSS

"Not greatly dissimilar to the public jubilation felt at the end of the second World War, Sydney-siders ..." http://bit.ly/cTvyuB #reallysad

Hilarious coverage of the iPhone 4 launch from the CNET guys. http://bit.ly/cTvyuB

What a sad way to live if the only joy in your life is to queue for a piece of defective technology sold by a vendor who accused his loya...

2 hours ago by fred9999 on iPhone 4 Australian launch: pictures

@Jetttje: outlook-alternatieven: http://www.zdnet.com.au/top-alternatives-to-microsoft-outlook-339295046.htm

RT @NASAWatch: NASA photos mooned in abandoned Maccas (LOIRP) http://bit.ly/arFI4Y

http://bit.ly/9y8rsU Multimedia Toolbar Icons - Free Software Downloads - ZDNet Australia

I am happy to know I was right about predicting Symantec's stock price and the furture trend. As I have pointed out a few times, I th...

7 hours ago by strelaoz on iPhone midnight launches across Australia

Just weirdly found out Michael Yell - Country and Regional Director for OEM, XSP and Services Business at Symantec Asia Pacific and Japan...

7 hours ago by strelaoz on iPhone midnight launches across Australia

As I have reported to Symantec Ethics about David Freer’s (VP, Symantec – Norton, APJ) misconducts (fraud, having dissented sex with ...

7 hours ago by strelaoz on iPhone midnight launches across Australia

David Freer (VP, Symantec Consumer Business Units - Norton, APJ) is a BIG LIAR! He lied to me for more than two and half years for my tru...

7 hours ago by strelaoz on iPhone midnight launches across Australia

My speed is 33 807 I'm with bigpond cable

10 hours ago by francoo on Broadband Speedtest

That is a beautiful boat,but, I'd still rather go to sea on a first flight 688 boat.Preferably the 689 if Clinton hadn't decommis...

10 hours ago by rogue689 on Get wet with submarine tech photos

For many other reasons, than just the net filter, the current has to go. Still, I wouldn't trust Abbot either. There are however chec...

11 hours ago by ian_from_oz on Conroy's filter masterstroke

RT: @zdnetaustralia: http://bit.ly/cJU6Mf We've added Virgin to our iPhone 4 pricing table comparison.. See which telco has the best deal.

The pick: five business iPad apps http://fb.me/DOid8NXt

Apple to look at iPhone 3G iOS 4 problems - Software - News http://bit.ly/cmaTAJ _ that's nice of them

Stop trying to dodge the filter issue, Conboy; it'll bite you in the **** whether you like it or not.

14 hours ago by Hyperion on Conroy pledges NBN map, same policies

@merejames http://bit.ly/9YJ6e7

Facebook va lansa un serviciu de răspunsuri la întrebările utilizatorilor http://bit.ly/aS4kLC

Survey proves #AUS e-health demand http://j.mp/ah9Iwf /via @ZDNetAustralia

A "profound cultural change" is required for a truly open government http://bit.ly/bTht86 /via @zdnetaustralia #gov2au

As one who has been as critical as any of the Sol era Telstra...as long as Telstra are leaving feasible room for profit margins for their...

16 hours ago by RS on Is Telstra the scorpion or the frog?

David, while the popular opinion, at least in the eyes of Telstra opponents, is to use every devious argument to stifle the operations of...

16 hours ago by sydneyla on Is Telstra the scorpion or the frog?

Question two: What is stopping.... "AUSTRALIANS could save up to $1.9 billion a year in travel costs, petrol and time if they spent h...

16 hours ago by Vasso Massonic on Is Telstra the scorpion or the frog?

Survey proves e-health demand: NEHTA http://itrau.com/bt9f8w via @ZDNetAustralia

RT @zdnetaustralia: Survey by NEHTA proves there is a demand for e-health http://bit.ly/bXuT1K

RT @zdnetaustralia: Telstra cops $18.55 million fine for exchange capping http://bit.ly/9cL91V

RT @zdnetaustralia: Survey by NEHTA proves there is a demand for e-health http://bit.ly/bXuT1K #yam

A good read..RT @zdnetaustralia: Is Telstra the scorpion or the frog? http://bit.ly/cSgC31

RT @zdnetaustralia: eBay and the Trading Post online help the Australian Taxation Office catch tax cheats http://bit.ly/dBDXRz

RT @zdnetaustralia Tesltra tweaks its data plans for all smartphones (not just the iPhone 4) http://bit.ly/bxO0G2

RT @zdnetaustralia: Is Telstra the scorpion or the frog? http://bit.ly/cSgC31

Is Telstra the scorpion or the frog? http://bit.ly/cSgC31

@mibus http://www.zdnet.com.au/commbank-dives-into-580m-banking-it-revamp-339288467.htm

The tech keeping Plastiki afloat: photos: ZDNet Australia brings you the tech below deck on the epic Plastiki voyage. http://bit.ly/aTj1QU

http://bit.ly/cJU6Mf We've added virgin to our iPhone 4 pricing table comparison.. See which telco has the best deal.

This story has been liked 5 times in the last 24 hours!

Keep up with ZDNet Australia

LinkedinLinkedin Join our network

RSS FeedsRSS Feeds Subscribe now

NewslettersNewsletters Subscribe today

TwitterTwitter Follow us

Sponsored resources