Smart meter rules leave consumers unprotected

The accelerated rollout of smart meters in Queensland, NSW, South Australia, and the ACT is showing signs of being rushed, empowering retailers and meter installers at the expense of consumers, leaving them confused and vulnerable to being ripped off. 

The installation of smart meters also means changes to the way consumer power usage is measured and how prices, or tariffs, are applied.  

For an explanation of smart meters and tariffs, read the section at the end of this article. 

National Seniors Australia isn’t opposed to smart meters but is opposed to customers being automatically transferred to new tariffs they don’t understand, as this could result in higher energy bills. You can read more about what we’re pushing for later in this article. 

New rules for energy retailers to speed up the roll-out of smart meters will take effect on 1 June this year, and customers will no longer have the option to opt out of receiving a smart meter.  

Retailers have begun communicating to customers who had previously opted out, to alert them of this change. 

Worryingly, the time available to opt-out from a smart meter ends before consumer protections promised by the regulator apply from 1 December 2025, leaving a period when retailers are largely free to move consumers onto new tariffs. As you will read later, NSW consumers are pushing back on the tariffs claiming retailers and meter installers are exploiting them. 

So, from 1 June we will no longer be able to refuse a smart meter. That’s six months (1 December) before consumer billing protections start. These protections include a two-year window where consumers can’t be automatically moved onto a different tariff without their explicit consent (though there are exemptions). After the two years, consumers can be switched, with no consent required. 

Energy retailers are already trying to move people onto smart meters before 1 June. 

In a worryingly glimpse into the smart meter future for other states and territories, the NSW power and water watchdog has reported a major increase in complaints about sudden, unexplained changes to people’s electricity tariffs. 

Such changes involved customers being switched from flat rate prices, where they paid the same rate for a unit of power no matter when they bought it, to complex and dynamic charges. 

Among these were time-of-use tariffs, in which customers paid more for power at peak times, and demand charges, which involved charging someone based on their single biggest half-hour of use across an entire month. 

Also, smart meters were supposed to replace billing by “estimated electricity use” with actual usage. However, the NSW Ombudsman’s report detailed complaints by customers on smart meters that retailers were still billing according to estimated power use. 

The report outlines the disconnect between energy retailers, customers and meter service providers (MSPs), which own and control the smart meter at customer’s properties. 

The NSW Ombudsman was critical that there was no regulation requiring MSPs to respond to customer or retailer queries, assist with resolving customer disputes or participate in external dispute resolution schemes, limiting its ability to assist customers, with complaints taking longer to resolve. 

The Ombudsman said customers are confused about receiving estimated bills and frustrated by lengthy delays when trying to dispute or query a bill with their retailer. 

“The smart meter rollout aimed to increase flexibility and customer engagement with the energy market, by allowing customers to manage their energy usage and save money,” the Ombudsman said. “But we aren’t seeing evidence of this in complaints … in fact we are seeing the opposite.” 

The NSW Ombudsman’s report confirms our suspicions that the hasty rollout of smart meters is currently not in consumers’ best interest, and that new tariffs are confusing and can result in higher energy costs if customers do not manage/minimise their energy use in peak times. 

Regardless, customers may not realise the implications of moving to a transitional demand tariff or time of use tariff until they receive their first bill. 

Most people would not know to question their retailer if they were automatically moved to a time of use or demand tariff before 1 December. Customers need to be aware of this situation but it’s very complicated. 

• The two-year protection from being automatically put on to a time of use or demand tariff, should apply immediately to any consumer moved to a smart meter – not from 1 December. 

• Customers should always have access to a flat tariff when a smart meter is installed, and they should not be moved to a time of use or demand tariff without their informed consent. 

• Customers with smart meters should be offered a dual tariff – that only charges them the lowest price from either a flat tariff or a time-of-use tariff (but displays both) – if the time of use is higher than the flat tariff they should be given information about how they could change their behaviour to get a cheaper price than the flat tariff. 

NSA’s position on the smart meters rollout can be read here , and the NSW Ombudsman report is available here. 

A smart meter is a digital electricity meter that measures and records electricity use at least every 30 minutes. This electricity data can be accessed remotely, so meter readers will no longer need to enter your property to read your meter. 

Smart meters differ to basic meters, which only measure the total amount of electricity a property has consumed and must be manually read by a technician every three months.

Flat-rate tariffs, also called single-rate tariffs, apply a flat fee per unit of electricity used during a period of time. They may include a “controlled load” tariff, which is a lower rate for some uses, such as electric hot water.  

“Cost-reflective tariffs” are meant to reflect the cost of providing different amounts of electricity at different times. There are two main types:  

• Time-of-use tariff: The price per unit of electricity can change throughout the day, week, and year. This often involves some combination of “peak”, “shoulder”, and “off-peak” hours.   

• Demand tariff: Adds a fee for the demand placed on the network, separate from a charge based on usage. The charge is based on the highest usage across the whole period. This can be based on a single point in time, a window of 15 or 30 minutes, a whole month, or even a season or entire year.  

There is more on smart meters and the tariffs here.