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The sad reality of the Smart meter roll out programme


We recently delivered our daughter to her new student house and found a notice from her landlord pinned in a prominent position next to the front door. It reads

Gas and Electric Smart Meters-

Your energy company will contact you about the above a number of times.

They will tell you the benefits of a smart meter, but not the downside. They will tell you, you have to have one- YOU DON’T.

They will tell you an appointment has been made to fit one- nobody has made an appointment.

TO SUMMARISE- NO MATTER WHAT ANYBODY TELLS YOU I DO NOT WANT A SMART METER FITTED IN THIS PROPERTY AT THIS POINT IN TIME, SO WHATEVER HAPPENS JUST SAY NO NO NO’.

This notice brings alive many of the points highlighted by Citizen’s Advice in their recent plea to OFGEM/Government to extend the rollout deadline from the end of 2020 to the end of 2023, and can only result from previous poor customer experience. The exasperated tone is clear to all.

On the other side of the fence, we have OFGEM maintaining pressure on suppliers to adhere to the 2020 roll out date. Their heavy handed open letter in May this year, could have left no supplier under any illusion that they were under the cosh for delivering to the prescribed timescale. Equally the apparently unlimited marketing budget of Smart Energy GB, provides a relentless range of TV ads, full page spreads and upbeat glee on the benefits of being in possession of a smart meter.

So if consumer protection is central to all of this, but the undoubted advantages of moving to a smart world are clear- what is the right answer?

To answer the question it is worth stepping back to assess where we are:

1) SMETS1 vs SMET2 rationale: The simplified story goes, SMETs1 meters were developed before there was a standard protocol, resulting in the development of multiple varieties of metering technologies and communication methods. It was considered too hard to try and develop a central hub to accommodate all the different combinations of SMETs1 meters, so instead it was decided to develop a central communications hub to support newly developed SMETs2 meters, which were characterised by a common protocol, allowing switching and interoperability.

Roll forward- The technical IT programme is far harder than anyone hoped and is therefore burdened with delays and issues. The roll out of the central hub and SMETs2 meters is consequently delayed, but due to the ongoing obligation on suppliers the volume of SMETs1 meters installed continues to rise.

Roll forward again- Due to the now volume of SMETs1 meters installed, it is decreed essential that functionality is developed to allow all SMETs1 meters to be supported by the central communications hub. This is currently targeted for delivery in 2019 but given how hard it was deemed to be in the first place, and evidence to date, you can only be cynical about the likelihood of success. However, assuming that the technology is in place and working, the next challenge is to migrate all the different types of SMETs 1 meter into the central communications hub. Logically, the plan that has been developed is to migrate by meter type- which is good from a central control perspective, but a potential nightmare from a supplier perspective, who will have to manage the customer end of the phased migration.

Roll forward to today- BEIS has confirmed that from December 5th 2018, SMETs1 meters (apart from prepayment) may no longer be installed and SMETs2 will be the standard for smart meter roll out. Now look at the statement in the context of the progress of SMETs2 roll out to date- I understand that there are only about 50,000 SMETs2 meters installed so far (a significant increase on the 80 that were attached to walls at the start of the year). I’ve heard horror stories of an installation taking up to 8 hours (in a customer's home), due to the challenges of getting the communication channels to work. On top of this, I know that there are real issues with supply chain provision of the hardware required for a successful installation, let alone the availability of people with the right skills to undertake the work. It does not bode well for a successful large scale roll out.

2) Data Communications Company (DCC) readiness (or lack of) : Anyone who has ever delivered an enormous IT programme will have some sympathy with the DCC who are responsible for delivering the central communications hub- including all of the changes now required to support SMETs1 meters. On the other hand, anyone close to the operational end of smart meter rollout is getting increasingly frustrated with unplanned maintenance outages, change freezes and declining service levels from the DCC, resulting in a real impact on customer experience. And this, with around only 50,000 meters live on the systems. Whatever is being presented at top level, those at the working end are just not convinced that the system is fit for large scale deployment.

Another revealing and worrying recent development was a Request for Information issued by the Smart Energy Code (SEC) panel following their August meeting. The meeting highlighted concerns that a combination of DCC system design and Parties not fulfilling their obligations (both under the SEC and other industry Codes) means that smart meter related data is already becoming inaccurate. The RFI goes on to highlight examples where data quality issues have been identified and suppliers and other stakeholders have been asked to provide further insight into the issue. Again, for those at the working end this probably does not come as a surprise, but does not engender confidence.

3) Suppliers’ inability to manage the issues: Suppliers large and small, are required to take all reasonable steps to roll out smart meters to all their domestic and small business customers by the end of 2020. What 'reasonable' means is open to interpretation, as highlighted by my daughter’s landlord. Clearly heavy handedness is not acceptable and not in the consumer’s interests, but equally a low take up of smart meters will potentially result in suppliers facing costly investigations and fines from OFGEM. All that, assuming that the supplier's supply chain can support the pace of roll out required- a challenge particularly for the small suppliers who do not have the negotiating leverage of scale.

Suppliers also bear the brunt of the fall out from the failings of the programme so far. In addition to delivering the roll out programme, all will now need their internal processes, systems and supply chain to be developed to support multiple meter management scenarios:

For example:

- Dumb meters…..which customers want to keep

- Dumb meters…..which are to be transferred to SMETs2

- Existing SMETs1 meters….which are in the early migration phases…to transfer to DCC

- Existing SMETs1 meters….which are in late migration phases…to remain in dumb or SMETs1 mode (depending whether the supplier can support the specific meter) …until the DCC is ready to migrate

- etc.

The development of existing systems and processes to support at least these, and probably more scenarios, will come at a cost, the recovery of which is capped by the price cap. So the decision for suppliers is whether to create lower cost semi manumatic ‘work arounds’ or invest in systems capability, the functionality of which will only be required until everyone with a smart meter is on the DCC systems. All of this to be managed in a period when millions of new meters are being installed in order to achieve the 2020 deadline.

What is clear, without a shadow of a doubt is despite best efforts, the result will be a significant degradation of customer experience, and the exponential rise of complaints (although hopefully not from my daughter's landlord, who has adopted the self preservation approach). The cause of these complaints will be firmly pointed as always at suppliers, being the regulated entity, despite their having minimal control over the cause of most of the issues.

The roll out programme is a monumental mess, which gets worse by the day. Without a doubt, it is time to take the decision to stop for a period, or at least significantly slow down and spend time regrouping and planning for success in light of reality. Going back again to my daughter’s landlord- if the current programme continues uninhibited, I can’t imagine a time when his notice will be taken down. I too cannot imagine wanting to move to a smart meter for quite some time.