«Ref: C14-RMF-68-03 19 March 2015 Council of European Energy Regulators asbl Cours Saint-Michel 30a, Box F – 1040 Brussels, Belgium Arrondissement ...»
With the introduction of smart metering, there will be greater potential opportunities to use data in a way that generates value for customers. The imposition of a cost could limit the scope of such benefits. Therefore, the negative impact of imposing a cost on customer meter data is potentially greater in a sector with smart metering, than it is in a sector without smart metering.
3.3.5 Role for third parties
Third parties are a category of parties that can make use of customer meter data to offer a range of services to customers. The way in which they do so and the value they can generate by doing so will be impacted on by the way in which the data is managed. A third party can act on behalf of the customer, offer customers alternative routes to engaging with energy markets and empower customers to make better choices. This may result in customers saving money. The value third parties can generate for customers in the energy market depends to a large extent on their ability to access customer meter data.
It is of highest importance to recognise that data sharing with third parties can be done only after customer consent22. Work undertaken by some regulators, including Ofgem in Great Britain, highlighted that customers had concerns (either real or perceived) about the practices of third parties;23 specifically, that some may not be fair or transparent.
Final Guidelines of Good Practice on Regulatory Aspects of Smart Metering for Electricity and Gas, ERGEG – Ref: E10RMF-29-05, February 2011.
Third Party Intermediaries: exploration of market issues and options - Consultation, Ofgem, 28 June 2013. In its document, Ofgem recognised that these concerns could be detrimental to customers, could damage the reputation of all third parties, and 20/38 Ref: C14-RMF-68-03 Customer Data Management for Better Retail Market Functioning The opportunities for third parties in retail energy markets is likely to grow with the introduction of smart meters and smart grids. This reflects the fact that the scope of the functions such parties could undertake will increase with a greater level of data being generated. Equipped with more data, third parties could provide additional value-added services such as analysis of energy usage – providing energy saving advice and providing services that monitor vulnerable customers' usage. Third parties could also become involved in providing demand-response services and advising on time-of-use and dynamic prices etc.
3.3.6 Timing of data sharing
Data has a time value. The more quickly parties receive data, the quicker they can respond.
The timing in which parties receive customer meter data will depend on the processes in place to share that data. The process will in turn be impacted by the model of data management in place.
The potential cost savings and energy efficiency gains from being able to respond to customer meter data in a timely manner are significant. However, the value of sharing customer meter data quickly depends on the robustness of that data; if the data shared is of poor quality, then the value that can be gained by providing it in a timely manner is lost and can even be detrimental - i.e. customers could make the wrong decisions based on inaccurate customer meter data.
The introduction of smart metering will have a significant impact on how quickly parties can access customer meter data. Smart meters will provide data frequently enough, enabling customers to make consumption choices. This could have significant cost benefits for the customers.
3.3.7 Network Management
Network operators use customer meter data to help operate the network in the shorter term, as well as network planning and investment in the long term. The introduction of smart metering will mean that network operators have access to more detailed customer meter data in a more timely manner.
3.3.8 Incentives on suppliers and other service providers
CEER recommends that the general market model should aim to be consumer-centric24. In such a model, the supplier will be the main, but not only, contact for the customer. Ultimately, the incentive on suppliers is to use customer meter data in a way that helps them both to retain existing customers by delivering a high-quality services and to attract new customers by making enticing product offers.
Data management models that provide market participants with information about customers' preferences allow current and potential market participants the possibility to offer products and services that meet those preferences. At the same time, where have the potential to hinder competitive activity in the energy market overall.
Electricity and Gas Retail market design, with a focus on supplier switching and billing Guidelines of Good Practice Ref:
C11-RMF-39-03 24 January 2012
customers are provided with up-to-date information about offers, they are in a better position to take a view on the services that are right for them, including the appropriate tariffs as well as other services that can be a part of the offers. Customers can also take a view on which supplier is right for them and can consider the merits of switching supplier. It is this customer empowerment that strengthens the incentive for suppliers to continually improve the quality of service and/or provide competitive offers.
If the customer data management arrangements result in poor (inaccurate, insufficient or outof-date) customer meter data being available to suppliers and customers, it is difficult for suppliers to offer the right products and services, and it is difficult for customers to appropriately assess their options.
With the roll-out of smart meters, more opportunities will be presented to improve the incentives on suppliers and the interaction between suppliers, third parties and customers.
The availability of more granular customer meter data will enable service providers to offer products that are more suitable to their customers’ consumption needs.
The greater frequency and quality of billing data should promote greater accuracy and reduce the scope for errors. This, in turn, should reduce the level of complaints from customers.
Currently, in European energy retail markets there are opportunities for suppliers, network operators and third parties to innovate, thereby improving service for customers and reducing the customers’ costs. Innovation is likely to be incentivised where there is highquality customer meter data and market participants are able to see the opportunity to use that data to offer services. Such innovation can deliver more choice and better solutions for customers.
The key risk is that the data, that has the ability to drive innovation, is not made available at the right times and to the necessary parties. For example, suppliers would have less reason to invest in innovation if there was little competition for their market share.
Given that different data management models apply, it is important to have some common minimum principles that govern the arrangements. Through this Advice, CEER suggests implementing a set of five guiding principles, applicable regardless of the data management model. These are: Privacy and Security; Transparency; Accuracy; Accessibility; and NonDiscrimination.
We present each of these guiding principles below, accompanied by recommendations (seven in total).
At the outset, it is important to highlight that the issues of privacy and data protection are much wider than the focus of this document and that energy regulators are not data protection regulators. The requirements for data protection are already set out in EU data protection and privacy legislation.
We note the work undertaken by the Smart Grids Task Force and, in particular, the work of Expert Group 2 on regulatory recommendations for privacy, security and data protection. In addition, we note that in its Final Guidelines of Good Practice (GGP) on Regulatory Aspects of Smart Metering for Electricity and Gas 25, ERGEG recommended that the customer should choose the way in which metering data shall be used and by whom, with the exception of metering data required to fulfil regulated duties and within the national market model. The principle should be that the party requesting information shall state what information is needed, with what frequency and will then obtain the customer’s approval for this 26; this includes third parties. CEER continues to support this view.
Customer’s interests are probably served by the appropriate sharing of customer meter data with parties that can use that information to offer customers improved service standards and lower costs.
We consider it important that the data management arrangements should serve to protect the privacy of personal data and that the customers should ultimately be able to determine how their data is used. We also consider it important that the relevant bodies support the development of data management arrangements that highlight the benefits of sharing customer meter data with third parties, thereby helping customers maximise the value from their data. This is even more important in the context of smart meters with a view to maximising the additional opportunities they provide.
Final Guidelines of Good Practice on Regulatory Aspects of Smart Metering for Electricity and Gas, ERGEG – February 2011, Ref. E10-RMF-29-05 Recommendation E/G 1. Customer control of metering data: It is always the customer that chooses in which way metering data shall be used and by whom, with the exception of metering data required to fulfil regulated duties and within the national market model. The principle should be that the party requesting information shall state what information is needed, with what frequency and will then obtain the customer’s approval for this. Full transparency on existing customer data should be the general principle. For instance, when a service provider is in charge of information on the customer’s voltage quality the customer should in this case be able to a) know that this data exists, and b) receive information on the explicit data. This information could be subject to a reasonable fee.
23/38 Ref: C14-RMF-68-03 Customer Data Management for Better Retail Market Functioning Recommendation 1: Customer meter data should be protected by the application of appropriate security and privacy measures. Customers should control access to their customer meter data, with the exception of data required to fulfil regulated duties and within the national market model.
The principle should be that the party shall state what information they will collect, with what frequency and for how long.
Principles on allowing access to customer meter data should be ensured by legislation/regulation.
The table below is from CEER’s Status Review of Regulation on Smart Metering27 and sets out the position of customers in each country with respect to data privacy and security.
Table 2: Customer position of each country with respect to data privacy and security Table 2 shows that, in just over half of countries, customers are informed and are given control over their data. However, there are a number of countries that do not currently give this control.
It is important that the customer is the one who decides what will happen to their data, therefore, access by a third party usually requires the customer’s consent. As already stated there is data needed by specific parties, e.g. to fulfil regulated duties related to operation of the grid; this data can be accessed by authorised parties without the customer’s consent.
In the CEER public consultation and at the public hearing, there was a consensus that it should be clear that the customer is in control of the data and should be in the driver’s seat.
The Electricity and Gas Directives and the Energy Efficiency Directive specify that the policy framework for accessing energy usage data should provide customers with access to objective and transparent consumption data. Further, in its GGP on Regulatory Aspects of Smart Metering, ERGEG argued that the general principle for customer meter data should be ‘full transparency.’ CEER continues to support this view.
CEER Status Review of Regulatory Aspects of Smart Metering, Ref: C13-RMF-54-05, 12 September 2013
We note that in the THINK report - Shift Not Drift on demand response28 - it was proposed that customers should have easy access to disaggregated billing information when demand response is bundled with other service offers. CEER considers that transparency should extend beyond disaggregating billing information and that the wider data management arrangements should be transparent as well. Customers also need transparency as to who is using their customer meter data and for what purpose.
4.2.1 Providing Information
It is not only important that the customer data management arrangements are transparent to customers; there are other market participants e.g. network owners, third parties, etc. who may require access to customer meter data. To ensure the efficiency of the overall data management arrangements and ultimately to maximise the benefits to customers, it is equally important that the data management processes are transparent for those parties.
It is relevant to the customer’s benefit that they are able to understand the information – providing too much information may be confusing. So it is important to find a balance and to decide how data should be presented to the customer.
Recommendation 2: The relevant body in each MS (DSO/metering operator/other) shall make the following general information on meter data management publically available, as a minimum: (a) the customer’s rights with regard to customer data management; (b) what type of customer meter data exists and what it is used for; (c) how customer meter data is stored and for how long; (d) how the customer and market participants authorised by the customer get access to that data; and (e) within what time period the customer and market participants authorised by the customer have to wait to get disaggregated data. This should be ensured by the NRA.