Title: NSW/ACT Gas Change of User (CoU) Future State
1.Background
In anticipation of NSW/ACT movingto align with other jurisdictions which operate according to the FRC B2B/B2M system architecture, CSV format and FRC Hub Terms and Conditions; this paper outlines the proposal of how the Change of User (CoU)/Transfer process will operate in the new B2B/B2M environment.
With regard to the CoU/Transfer processes adopted in SA, Vic, QLD and NSW and the experience gained over a number of years in operating in each of these markets, the CoU process put forward here is a combination of various aspects of these CoU/Transfer processes, which is expected to provide an optimal solution for the CoU process for NSW gas.
Jemena feedback
Pre-existing B2B and B2M
Jemena notes that the paper states that this proposal relates to ‘the move to a Business to Business (B2B) and Business to Market (B2M) transactions within the NSW gas market’. It is of concern that the document is premised on the assumption that B2B and B2M transactions do not currently exist in the NSW and ACT jurisdictions.
Proposing a B2B and B2M regime in an environment where none exists provides many benefits to offset the cost of implementation that are not present where an existing regime is present, as is the case in the NSW and ACT jurisdictions.
Benefit and longevity of change considering Harmonisation
By way of Background, the paper makes reference to a set of proposed processes that are to be used by market participants in managing the transfer of consumers between retailers (COU).
As the COU process is primarily the means by which consumers are transferred between retailers, Jemena in principle supports any improvement to the process used by retailers which provides an efficient and effective outcome for consumers.
What is unclear is how the proposed process relates to the harmonisation of national B2B and B2M processes. The processes are purportedly only applicable to NSW and ACT, which would appear to limit their value given the B2B roadmap would see processes harmonised within a timeframe that does not allow any return of significance from any such investment prior to processes potentially changing again to achieve national harmonisation. If the processes proposed are in fact intended to be of the form that are harmonised nationally, their application to other states and jurisdictions should also be assessed in order to confirm this.
As Jemena would be required to implement a nationally harmonised processes under AEMO’s Harmonisation project by July 2015, the concern is whether an additional change prior to this will have sufficient longevity to satisfy a cost/benefit test, and the risk of delay the additional work might have on the time required to implement full harmonisation.
The cost, benefit and timing of this change should be considered in conjunction with the impact of the Harmonisation project in order to determine whether the change should proceed. In particular benefit analysis should focus on NSW and ACT consumers in order to understand whether those parties who would ultimately fund the distributor’s costs in implementing the change receive a net benefit as a result.?
Envestra feedback
Suggest amending the sentence to say:
With regard to the CoU/Transfer processes adopted in SA, Vic, QLD and NSW and the experience gained over a number of years in operating in each of these markets, the CoU process put forward here (by the retailers) is a combination of various aspects of these CoU/Transfer processes, which is expected to provide an optimal solution for the CoU process for NSW gas.
Collective Retailers response to NWO feedback
It is acknowledged there are both B2B and B2M transactions operating in the NSW gas market. Refer to the update in the ‘Background’ for clarification.
As discussed at the NSW B2B Working Group meeting on 26th October, this document is the Retailer view of how the CoU process will operate in the future. In order for these changes to come about the normal Retail Market Procedure change management process will need to be undertaken. The CBA for the NSW Project is based on the system architecture and transactions as per the Scoping Matrix and accompanying Scope Documents.
It is expected the Gas Road Map for Vic, SA and QLD will be informed by the NSW B2B Project (and this paper), with opportunities of harmonisation identified. There is no conflict between the Road Map and the NSW B2B project.
2.Actual Reads
Currently CoUs in NSW are allowed to complete on the provision of an estimated meter read. In line with other jurisdictions it is expected, with the introduction of B2B and B2M, transfers will only complete on the provision of an actual meter read. This reduces the risk of under/overcharging of customers by retailers and reduces the retailer’s wholesale exposure.
Jemena feedback
Under section 2, Actual Reads, The paper proposes that transfers only occur on actual reads and not those that are estimated. Two reasons are provided to justify this position. The first proposition is that the use of actual reads will reduce the risk of under or over charging of customers by retailers and secondly, will reduce the retailer’s wholesale exposure. In response to the retailers’ comments, Jemena notes:
•Whether an estimate is equal to, marginally higher or marginally lower than an actual read, the consumer will have the liability for the actual consumption when at some point in the future an actual read is taken. As the estimation methodology has no regard to whether a transfer is occurring or not, there is no implicit shift towards one retailer over another. The issue would therefore seem to be a balance between the short term allocation of the marginal discrepancy between an actual and estimate compared to the consequence of an expected transfer failing because an actual read was unable to be taken. It is unclear why the former is considered a larger issue for then consumer than the latter.
•In terms of wholesale exposure, a retailer’s withdrawal from the network is based in part on the same estimate that would be used to transfer a consumer. It is therefore unclear how a transfer on estimate would have any wholesale consequence for a retailer. Note that estimated meter readings are based on recent consumption at a particular meter.
If transfers are to be normally performed only on actual reads, it should be noted that there are situations in which industry will need to permit the use of estimate meter readings for COU or change of user on move-in (COUMI) transactions in order to ensure correct operation. For instance, the ability to use estimated meter reads for COU transactions during Retailer of Last Resort events and during any bulk transfer processes that are initiated under chapter 7 of the Procedures is required in order to give effect to the prescribed methodologies that respond to those events..
Envestra feedback
Envestra accept the proposal.
Collective Retailers response to NWO feedback
In addition to the issues raised by the retailers above, there remain concerns with transfers occurring on estimations. Agreed, an estimated transfer read will eventually see the customer liable at some point when an actual read is taking. However, the over/undercharging could extend beyond the transfer date and this has financial impacts on the current retailer.
In cases where multiple previous reads prior to the transfer completion date were estimated (could be up to twelve months) the discrepancy could be significant. The customer could be disadvantaged for example by overcharging and dispute their invoices with their new retailer, the customer may also dispute their invoices with the previous retailer making adjustments between retailers complicated.
It is also important Industryparticipants consider theirobligations are met in accordance to the NGL and the NERR which prove challenging to adhere to if we do not transfer on actual reads.
For example per the NERR under section 31 Overcharging advises;Where a small customer has been overcharged by an amount equal to or above the overcharge threshold, the retailer must inform the customer accordingly within 10 business days after the retailer becomes aware of the overcharging. Note—thissub rule is a civil penalty provision for the purposes of the Law. (See the National Regulations, clause 6 and Schedule 1.)
Another example per the NERR under 21 Estimation as basis for bills advises the retailer must include an adjustment on the later bill to take account of any overcharging of the customer that has occurred.
It is acknowledged transfers will occur on estimated reads in a RoLR event. The reason for this is the volume of sites which would need to have a read on the date of the RoLR event, to affect the transfer, could not all be done on that date.
It has been discussed on numerous occasions as part of the B2BWG that RoLR related process are not in current scope of the project.
3.In Situ CoU and Scheduled Reads
Where the proposed date on the in situ transfer request is the next schedule read date, as per the provision of basic meter reading data, the distributor or meter data agent may read the meter +/- 4 days of the scheduled read date and provide this read for the transfer as of the date the read was taken.
Jemena feedback
Jemena does not support the +/-4 day window for in situ transfers as it relates to the concept of a deemed read. Please refer to the response on deemed reads below.
Envestra feedback
Envestra accept the proposal.
Collective Retailers response to NWO feedback
Refer to the response under Deemed Reads – Move-in
4.Deemed Reads – Move-in
The CoU process requires a proposed change date to be provided on the transfer request. This is the date it is anticipated, an actual basic meter read will be provided which will allow the CoU to complete.
For the CoU move –in process in SA, the provision of the actual read for transfer completion allows for an actual read obtained up to 10 calendar days prior to the move-in/transfer date to be used as the transfer read. The read will be deemed to have been taken on the proposed change date in the transfer request.
In Victoria and QLD if there is a read 10 days prior to or 4 days post the proposed date in the transfer request, the transfer will complete on the date of the read in the -10/+4 period.
The proposal is to adopt a combination of the SA, Vic and QLD processes such that; if an actual read is available -10/+4 days from the proposed change date in the transfer request, the transfer will deemed to have occurred on the proposed change date not the date the read was actually taken.
The rationale being the property has been vacant (this is a move-in scenario), the consumption would be negligible (pilot lights) and thereis minimal, if any, risk of overcharging to the customer.
Should there be no read within the allowable period of -10/+4, the transfer will complete as per the date of the special read as requested by the retailer.
SA Retail Market procedures v3.0Division 4.2.4 – Basic meters – deemed meter readings
148. Deemed meter reading (basic meters only)
(1) If a meter reading for a basic-metered delivery point that generated an actual value was undertaken no more than 10 days before the date of move in, then(subject to clause 148(2)) on the date of move in:
(a) the network operator must determine a “deemed meter reading” which is a meter reading deemed to have occurred on the day ofthe move in; and
(b) provide the metering data from the deemed meter reading to AEMO.
(2) For the purposes of providing the metering data and calculating the energy value for a deemed meter reading, a network operator must use the mostrecent index reading from the meter reading which occurred no more than 10days before the move in to calculate the actual value under clause 155.
Vic Retail Market procedures v4.0
1.1.1 Definitions
The following words and phrases in these Procedures which appear in italics have the meaning given them in Part 19 of the Rules unless an intention to the contrary appears:
allowable period means either:
(a) in relation to a transfer request notification lodged without a customer no-change statement, the period commencing on the 10th business day prior to the proposed transfer date and expiring on the fourth business day after the proposed transfer date; or
(b) in relation to a transfer request notification lodged with a customer no-change statement, the period commencing on the fourth business day prior to the proposed transfer date and expiring on the fourth business day after the proposed transfer date.
Jemena feedback
Jemena supports the completion of a customer transfer on the date a meter reading is undertaken.
Jemena does not support the provision of deemed reads as occurs in South Australia This is because the provision of deemed reads means that a retailer will be provided with a distorted and inaccurate meter read for a delivery point. To clarify further, if an actual meter read is performed on one day, but deemed to have been read up to ten days prior to the transfer date, the deemed read provided to the retailer will not accurately reflect the actual consumption at the customer’s delivery point on the date of the deemed read.
Any deeming of a meter read creates an inaccuracy and diversion from reality regarding what actual consumption exists at a particular DPI at a particular point in time.
In addition, Throughput is measured by the difference between two meter reads, corresponding to the time period between those reads. Transportation charges therefore apply to the measured throughput between the times of measurement. Any deeming of reads would create a disconnect between what has actually occurred and is invoiced for, compared to what the market has deemed to have occurred for the purposes of a market transaction.
Note: Jemena seeks clarification on the following point ‘Should there be no read within the allowable period of -10/+4, the transfer will complete as per the date of the special read as requested by the retailer.’ This point seems to contradict the retailer concept of a meter read occurring within an allowable period.
Envestra feedback
Envestra accept the proposal.
Collective Retailers response to NWO feedback
The deemed read process has operated since FRC in SA with no perceptible adverse impacts to customers, retailers or the distributor.
As indicated previously the rationale being the property has been vacant (this is a move-in scenario), the consumption would be negligible (pilot lights) and there is minimal, if any, risk of overcharging to the customer.
To clarify the ‘note’ from Jemena; where a move-in transfer has been requested, the distributor will check if there is an actual read -10/+4 days from the proposed date in the transfer request. If there is no actual read or no read about to be taken within the timeframe, the distributor will arrange a special read to be taken for the proposed date. This is still in line with the allowable period.
5.Special Reads – In Situ
For in situ CoUs a retailer may request a transfer to complete based on a special read. A service order will be raised nominating the date of the special read which will coincide with the proposed change date on the transfer request.
SA Retail Market Procedures v3.0Division 3.3.2 – The Transfer Request
81. Transfer request
(1) A transfer request must specify at least the following information:
(a) the MIRN; and
(b) the incoming user’s GBO identification; and
(c) the earliest transfer day; and
{Note: Unless a special meter reading is requested for a basic-metered delivery point, the transfer of a basic-metered delivery point will take effect under clause 103(1)(c) at the time of the next scheduled meter reading which occurs on or after the earliest transfer day, provided an actual value is generated at that time.}
{Note: Under clause 83(i), an earliest transfer day must be no earlier than 5 business days after the date on which the transfer request is lodged (except where the requested transfer is a move in) and within the allowable period.}
{Note: For a move in, the transfer will take effect on the move in date or if there is no deemed meter reading or a special meter reading cannot be obtained on the move in date, it will take effect at the time a special meter reading is obtained under clause 99.}
Jemena feedback
Comments for Special Reads – In Situ, included in section 6 below
Envestra feedback
Envestra accept the proposal.
Collective Retailers response to NWO feedback
Refer to comments in ‘Special Reads – In Situ’
6.Special Reads – Move-In
Where the CoU is a move-in, and there is no basic meter read within the past -10/+4 days and there is no scheduled read for the transfer day and the retailer has not requested a special read, the distributor will undertake a special meter reading on the proposed transfer day.