The Australian Energy Regulator (AER) has recommended that the budget for rolling out smart meters in Victoria be slashed by 39 per cent from the amount proposed by the operators of the state’s distribution network.

AER said not all proposed spending was justified and concluded that the budget for the second rollout period from 2012 to 2015 be reduced to $760m from the $1.2bn proposed by the distributors CitiPower, Jemena, Powercor, SP AusNet and United Energy.

The distributors are required by the state government to provide smart meters to all customers by the end of 2013, and are allowed to pass those costs through to consumers through annual charges. But AER took issue with the proposed operating costs, which were well above what would normally be assumed, given that the rollout had already been partially completed and operating efficiencies could be expected.

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