BEIS told to "get a grip" on smart meter rollout costs

Written by Beckie Smith on 20 February 2019 in News
News

Committee chair Rachel Reeves said BEIS had been “too passive” in ensuring suppliers address problems with the rollout

The head of an influential parliamentary committee has accused the Department for Business, Energy and Industrial Strategy of “sugar coating” its progress on the rollout of smart meters as she said the department must do more to ensure suppliers meet their obligations to customers.

Rachel Reeves, chair of the Business, Energy and Industrial Strategy Select Committee, also urged the government to “get a grip” on the programme's costs yesterday.

BEIS initially aimed to make the devices, which give automatic meter readings and show customers' energy usage in real time, available to every household by 2020.


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But the programme has been beset by delays and the National Audit Office has predicted it will run intp an overspend of £500m by 2030 compared to BEIS’s last estimate in 2016. BEIS has said it plans to carry out an updated cost-benefit of the programme, to be published in summer.

A series of hindrances to the rollout – including delays in developing the required technology and smart meters “going dumb” when customers switch energy suppliers – mean the department now expects just 70-75% of homes to have a smart meter by the 2020 deadline.

Some members of the BEIS committee have expressed scepticism that even that revised target will be met.

And after taking evidence from energy minister Claire Perry about the programme’s progress, Reeves said the government had tendency to “sugar-coat and pretend that everything will turn out alright in the end”.

Coverage is especially low in some areas of the country, and the vast majority of devices that have been installed to date are first-generation maters, rather than second-generation SMETS-2 devices, which allow people to switch power providers remotely.

"Customers in the north are currently paying for smart meters through their bills but with little hope of having one installed in their homes compared to customers in the south,” Reeves said.

She said the government had been “too passive” in ensuring suppliers and DCC, the subsidiary of outsourcing giant Capita responsible for building the data and communications infrastructure for smart meters, address the geographical divide.

“The government needs to tackle these problems, get a greater grip on costs, and be much more active in holding energy suppliers and the Data Communications Company to account for delivering this programme and within budget,” she added.

Reeves’ comments were published alongside her written correspondence with Perry about the programme.

In her letter to Perry on 21 January, Reeves asked whether the government would include the marketing costs to suppliers of promoting smart meters in its next cost-benefit analysis of the programme, given that they would likely be passed onto customers.

In her response, dated 28 January, Perry said it would “not be appropriate” to allocate companies marketing costs being to the smart meter rollout. She said this was because some of the costs were included in suppliers’ existing marketing budgets, while others were using “existing touchpoints and processes in consumer journeys” to promote smart meters.

Responding to criticism that “only limited attempts have been made to monitor ongoing energy savings”, Perry said BEIS was tracking savings through industry data and consumer research.

However, she added: “We recognise that there is scope to enhance our evidence base further and are working with energy suppliers to review what evidence they hold on energy savings for households with smart meters, and will consider what can be made publically [sic] available.”

Reeves said the committee would continue to monitor the costs and timescales of the programme and the operability of smart meters. It would also “hold the government to account for their role in getting the smart meter roll-out back on track and ensuring that the interests of consumers are protected”, she said.

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Beckie Smith
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Beckie Smith is a reporter for CSW who tweets Beckie__Smith.

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