PER­SONAL AC­COUNT

The Daily Telegraph - Your Money - - YOUR MONEY - Richard Dyson

Smart me­ters won’t bring an end to the mud­dle of es­ti­mated en­ergy bills

Idon’t think it will be very long be­fore more house­hold­ers, like me, ques­tion the point of their smart me­ters and de­mand to know why as a na­tion we’re spend­ing £11bn in­stalling them.

So far al­most five mil­lion have been in­stalled, with the aim that 26m homes will have them by 2020.

Yet a sur­vey pub­lished last week by Smart En­ergy GB – the body set up at some con­sid­er­able ex­pense to pro­mote the roll­out of these de­vices – re­vealed that two in three peo­ple don’t know what they are. That’s de­spite a mar­ket­ing bud­get of around £25m to spread the word.

If you are among the ma­jor­ity still to be en­light­ened, let me ex­plain.

“Smart me­ters” are me­ters that go a bit fur­ther: they track do­mes­tic gas and elec­tric­ity us­age, like their old-fash­ioned pre­de­ces­sors, but they dif­fer in that they then trans­mit this in­for­ma­tion di­rectly to the sup­plier. They also trans­mit con­sump­tion data to an “IHD” – that’s an “in-home dis­play” – where bill­pay­ers can see ex­actly how much they’ve used and spent.

In prin­ci­ple, fan­tas­tic. No more me­ter read­ings, ei­ther un­der­taken by some stranger who knocks on your door at an in­con­ve­nient mo­ment or in­deed by your­self (when you for­get whether you’re sup­posed to in­clude the dig­its af­ter the dot or not).

No more es­ti­mated bills. Pay only for the en­ergy you use. Cut down on your en­ergy use, sim­ply by know­ing in greater de­tail how much you are pay­ing for it.

Those are the claims made by Smart En­ergy GB – and they cer­tainly lay them on thick. Their lit­er­a­ture and ad­verts are crammed with state­ments such as “smart me­ters will bring an end to the era of es­ti­mated bills”.

I would still splut­ter in shock if I was told the cost of de­liv­er­ing the above ben­e­fits was £11bn. But the re­al­ity is prob­a­bly worse: the cost will be that high, but the ben­e­fits won’t fol­low through.

For a start, mil­lions of peo­ple will still have es­ti­mated bills, what­ever Smart En­ergy GB claims.

Providers are a lit­tle hazy on the num­bers, but it seems that a great many of those who have smart me­ters so far are still pay­ing by di­rect debit, and are choos­ing – or have drifted by de­fault in to a sit­u­a­tion where the choice was made for them – to spread their pay­ments over a year.

In these cases you still pay a fixed sum each month. The amount you pay is guessed at by your en­ergy provider (al­beit based on the fre­quent read­ings sent in by your smart me­ter) and the sup­plier’s for­mula. That is not es­pe­cially “smart”. In fact it sounds very much like the old sys­tem where, inevitably, cus­tomers ei­ther un­der­paid or over­paid.

I re­alise that some sup­pli­ers in­clude op­tions where you can opt to pay each month for ex­actly what you use. And that may suit some peo­ple, but in re­al­ity most house­holds want to pay a more-or-less sim­i­lar amount each month, even though their ac­tual costs in win­ter will be far higher than in sum­mer. That’s how you bud­get.

I’ve had a smart me­ter in my home since early 2015. Ev­ery month I pay pre­cisely the same sum of £102 to the sup­plier, Ovo, by di­rect debit. If I were to go home now and switch off ev­ery last thing, I’d still pay £102 per month, at least for a while.

I’m not con­vinced this is widely un­der­stood.

Nor am I con­vinced that smart me­ters will fix the en­ergy in­dus­try’s scan­dalous in­abil­ity to man­age data. This, af­ter all, has noth­ing to do with how the data it­self is col­lected. Ovo sent me an an­nual snap­shot in De­cem­ber, for in­stance, show­ing my gas con­sump­tion had fallen by about 80pc be­tween 2015 and 2016. Wow. Sadly very wrong.

Ovo later said “the fig­ure was in­cor­rect due to an iso­lated is­sue with how in­for­ma­tion was pulled”. And de­spite hav­ing had a smart me­ter for nearly two years, my lat­est bill still had the omi­nous words: “These fig­ures have been based on es­ti­mated me­ter read­ings.”

Ovo, still in­ves­ti­gat­ing, spec­u­lated that “the smart me­ter con­nec­tion was lost tem­po­rar­ily”.

While sur­veys show homes with smart me­ters are cut­ting their con­sump­tion as a re­sult of star­ing at their “IHDs”, I’m scep­ti­cal. If you’re pay­ing the same amount each month, you’re hardly in­cen­tivised fi­nan­cially to switch off the lights. There are bet­ter rea­sons to do that.

‘What you pay each month will still be your sup­plier’s es­ti­mate’

Tim Rhys Evans of the BBC’s Last Choir Stand­ing

com­posed a song ‘ to cel­e­brate the com­ing of smart me­ters’ as one of Smart En­ergy GB’s pub­lic­ity ini­tia­tives

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