Ofgem launches smart meter review

Ofgem is launching a consultation into smart meters to target concerns over consumer protection. The government wants smart meters in all homes in five years’ time, but Ofgem is acting […]

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By Kelvin Ross

Ofgem is launching a consultation into smart meters to target concerns over consumer protection.

The government wants smart meters in all homes in five years’ time, but Ofgem is acting now because some companies, including British Gas, plan to begin rolling out the meters by the end of next year.

Ofgem said today that while smart meters will deliver significant benefits to consumers, they pose “new issues which it is important to address in order to ensure the continued safeguarding of consumers’ interests”.

It added: “Smart metering requires smart regulation. We are therefore consulting on a range of licence changes which will update and clarify the consumer protections in the gas and electricity supply licences to reflect a smart metering environment.”

In particular, Ofgem is looking at issues of remote switching to prepayment, remote disconnection and commercial interoperability, which is says is “important in ensuring consumers can continue to switch supplier where they have a smart meter”.

Zoe McLeod, energy expert at watchdog Consumer Focus, said today:”It is very welcome that Ofgem is proposing measures to protect consumers against being remotely disconnected or their supply switched and their energy supply limited. These are essential steps to stop consumers being treated unfairly.”

But she added: “However, there are still major concerns for consumers around smart meters which must be tackled. The next step must be for suppliers to address the data protection and privacy issues which the introduction of smart meters, and the information they collect, inevitably raise.

“Suppliers must make sure that customers retain the privacy they want and the ability to switch easily to tariffs that work for them. We want to see firms rise to this challenge and make sure that customers who get smart meters early get a good service.”

Consumer Focus has been raising concerns over smart meters for some time. Last year, McLeod said: “We have real concerns that without the right leadership and right regulatory framework that many of the benefits will not be delivered to consumers and that there could also be unnecessary detriment to customers.

“Lack of consumer engagement it could hinder the delivery of public policy goals, for example energy efficiency, low carbon energy and security of supply.

“Consumers are being asked to sign a blank cheque for smart metering. What we need is to make sure that if costs are passed on to consumers – and we would query that – that there are mechanisms in place to make sure that costs are efficient, that they’re proportionate and that they are fair.”