The Parliamentary Commissioner for the Environment says there is a continued lack of leadership in the electricity sector and consumers and the environment are losing out.
Dr Jan Wright has released an update to her 2009 report on the benefits of smart digital electricity meters that were starting to be rolled out to 1.3 million households that year.
She believes the electricity system is too fragmented and needs regulating.
Dr Wright says it's now too late to standardise the smart meters, which can give householders more control over electricity usage, as it was left up to retail companies to put the smart features in that suited them.
"My concern now is about the smart grid as a whole and that somehow we get out act together better on that, because this is important for the future."
The commission says although substantial funding is going into research to make the country's electricity grid smarter, regulation as well as improved technology is needed.