Smart Meters Bill — House of Commons, 2017-10-24
Topic: Energy
Stephen James McCabe (Labour, Centre-left): I do not argue with plans for a special administration regime in the event of a failure of the DCC, but I have a number of questions about the programme’s roll-out, extension, monitoring and costs. The current smart meter programme is at stage 2, alternatively referred to as the main roll-out, and that is scheduled to end in 2020 As we have heard, the vast majority of energy companies are still installing the earlier generation of smart meters rather than the more efficient, cheaper and longer-lasting second generation. The Government have announced that, as of July 2018, SMETS 1 will no longer count towards the 2020 target. As that phase was due to be completed in 2016, what are the reasons for allowing the installation of those less efficient meters until 2018? Has the Minister received any representations from energy companies urging it and, if so, what reasons have they given Lord Bourne told the Energy and Climate Change Committee that there were 2 million smart meters in store. Could that have anything to do with the decision? If so, is there a risk that the Minister might be accused of massaging the figures with what is essentially an inferior meter I know from information supplied in answer to parliamentary questions that by December 2016 some 330,000 smart meters were operating in dumb mode—not operating as smart meters—and that by March 2017, that figure had risen to 460,000, involving a cost of between £30 million and £50 million. Who is responsible for keeping tabs on the costs of this programme I asked in a parliamentary question how much had been spent on the installation of SMETS 1 meters to date, and the answer was "the Government does not hold data on expenditure on smart meter installations" EDF Energy has also questioned the extension proposed in the Bill and argues that "if these powers are to be extended a clearer rationale should be provided for the need, and length, of any extension." The Minister will be aware that the Energy and Climate Change Committee raised questions about the 2020 target, and he will know that both the Institute of Directors and some in the industry have suggested that the purpose of the extension might be to give the Government wriggle room The Minister will also be aware that, in May 2015, the Energy and Climate Change Committee warned that problems with smart meters are "symptomatic of a national programme that the Government has left largely to suppliers and failed to drive forward effectively." The Committee also warned that, without significant changes, "it could prove to be a costly failure." Part of the justification for this programme is that it should mean that consumers benefit because they are able to shop around for the best deals, but if a SMETS 1 meter can no longer function as a smart meter when a customer switches, is that not a barrier to switching rather than an encouragement? As this is a voluntary programme, would someone not be well advised to wait until they are offered a SMETS 2 meter, or indeed to demand one? MoneySavingExpert.com, the UK’s biggest consumer website, is advising its readers to do just that As we have heard, the Government’s cost-benefit analysis estimates that by 2030 smart meters will have delivered £5.8 billion of net benefits. Those benefits, which are to energy suppliers, networks and consumers, are offset by a cost of £11 billion paid for by consumers. According to answers to parliamentary questions I submitted, the net benefit was reduced by a further £1.5 billion between 2014 and 2016. Can the Minister explain that reduction? Although the Government have said in answer to a parliamentary question that there is no link between this reduction and the issue of the interoperability of SMETS 1 meters, they also say that the 2016 cost-benefit analysis has already made allowance for the plan to enrol and adopt SEMTS 1 into the DCC. I understand that the cost of the DCC has already risen by a further half a billion pounds since it was first proposed. Who is responsible for monitoring and containing these costs In September 2016, the House of Commons Science and Technology Committee suggested that the essential aims of the smart meter programme are likely to fail without "a programme of user engagement before, during and after installation." It is becoming clear that there is a lack of consumer trust and confidence in, and understanding of, the smart meter roll-out. As we have heard, the Department for Business, Energy and Industrial Strategy’s most recent public attitudes tracker found that people were less than convinced about smart meters, and a recent article in The Daily Telegraph claimed that only one in five consumers is accepting the offer of a smart meter. I know the Minister is eager to promote customer satisfaction, but without a renewed campaign to increase public awareness and improve perceptions of smart meters, there must be a concern that the benefits will not be realised I also want to ask about evidence that has emerged about the behaviour of energy suppliers and those they engage to promote their plans. They are required to take reasonable steps to offer smart meters, so why are people receiving cold calls claiming that accepting one is a legal requirement? I understand that the Minister might have already referred this to Ofgem, but can he confirm that that is the case? If so, will he indicate when we might expect to hear some response? There are also some safety concerns, as highlighted by—