News & Press

Smart moves on meters but a closer eye is needed on costs – says consumer watchdog

Published: 5 April 2012

Responding to DECC’s announcements on smart meters today, Audrey Gallacher, Director of Energy at Consumer Focus, said:

‘There is good news here for customers with wins on data privacy, sales and marketing and engagement with consumers. But we continue to have concerns that the costs of the scheme may be underestimated and that costs for consumers could rise. Further action is also needed to make sure all customers get the full benefits smart meters could supply. 

‘We welcome the banning of sales during installation and that marketing will only be allowed if the customer agrees. This shows the Government has listened to consumers.  We support the proposals to address consumer concerns around the privacy of information. But, to make this work, people must be aware of their rights and the choices available to them on how much information is passed to suppliers.

 ‘It is welcome that the Government has recognised the need for a much stronger and better co-ordinated strategy to engage consumers. Smart meters will only help people to become more energy efficient and cut their bills if they are able to easily understand and use the new technology. We hope this move will pave the way for a support scheme for vulnerable customers to ensure everyone gets the benefit of smart meters.’  

 A breakdown of Consumer Focus’s views on other elements of today’s announcement are below.

 Data privacy

  • We welcome Government moves on privacy. But customers will need to be aware of their rights and the choices available.  Also people should not be charged to access their energy data in an easily usable format, as has been a problem with some small businesses.1

Meters

  • The Government has decided that any smart meter installed ahead of the wider roll-out must be removed if it does not meet strict requirements to be imposed on meters installed from 2014. This is very welcome – it could save customers hundreds of millions of pounds and help minimise barriers to switching. However there are still some question marks about whether smart appliances and displays will be able to work across all energy suppliers for those that get meters before 2014.

Supplier Installation Code of Practice

  •  We strongly support new rules to help minimise customer inconvenience and help people make the most of their smart meter – including requirements on installers to provide energy efficiency advice as part of the visit and signpost customers to impartial sources of support. But how successful these rules are will depend on how effectively suppliers implement them.

Fuel poor and prepayment meter customers

  • We welcome the greater focus on needs of vulnerable consumers in these proposals, and the decision to require suppliers to make sure the technology meets the needs of, and is usable by, all consumers. However the Government has still not carried out its promised assessment of the impact of smart metering on fuel poverty. This must be done to make sure steps are taken so all customers benefit.
     
  • We also remain concerned about the lack of detail on how to make the scheme benefit prepayment meter customers, many of whom live on low fixed incomes.2 Smart meters could revolutionise the pay-as-you-go energy market, delivering cheaper tariffs and better customers service, but only if PPM customers are a higher priority.

Costs

  • Consumers need transparency and accountability over the costs of this scheme to make sure the Government keeps these in hand – competition alone will not deliver cost efficiencies.

ENDS

Notes to Editors:

  1. A Consumer Focus information request in 2010 found some non-domestic suppliers were charging small businesses with advanced meters a daily fee to access their own energy information via an online portal. This fee varied with the most expensive fee charged at 55p per day.
     
  2. It is likely that prepayment meter customers will not achieve the same energy savings from smart meters as those on other payment types, yet they will still be required to foot the bill. The lower benefits may be because they are already more energy aware or energy efficient due to budgetary constraints. DECC’s impact assessment estimates that gas prepayment meter customers will get average savings of 0.5% compared to 2% for gas cash and cheque customers. It is therefore crucial that they get other benefits such as cheaper tariffs, in home displays that meet their needs, more convenient ways to top up and improved customer service.

Factfile:

  • The GB smart meter rollout is potentially the largest in the world, involving the installation of more meters in more than 28 million homes. In total it is estimated that 53 million meters will be installed in 30 million premises (homes and businesses).
     
  • DECC currently estimates the cost of the scheme at £11.5 billion. The average cost per household will be £7 by 2015. Government estimates that overall the average dual fuel customer will make net savings on their energy bill of £25 per annum by 2020. Overall cost (not including customer benefits if these are not realised) is £387 per household.

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