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Ofgem Raises Alarm Over Lagging Smart Meter Installations for Prepayment Users

Ofgem, the UK's energy regulator, has expressed serious concerns over the sluggish pace of innovative meter installations for prepayment customers and households dependent on Radio Teleswitch technology. In an open letter, Melissa Giordano, Ofgem's Deputy Director for Retail Systems and Processes, addressed energy suppliers directly, highlighting a notable disparity in the deployment of smart meters.

Giordano pointed out that while over 60% of UK homes are now equipped with smart meters, the installation rate for prepayment meter customers needs to catch up, falling below 50% for some significant suppliers. This discrepancy, Ofgem suggests, disproportionately affects vulnerable and fuel-poor households, many of whom use prepayment meters and are missing out on the various advantages smart meters offer.

These benefits are substantial:

  • Easier credit top-up processes

  • Enhanced monitoring and control of energy usage

  • Access to a broader spectrum of cost-saving tariffs

Moreover, smart meters can be instrumental for suppliers in identifying early signs of self-disconnection in households, enabling them to provide timely support, including emergency credit.

Smart meters are not just about consumer convenience; they play a crucial role in energy management, aiding in efficiently deploying renewable power and supporting clean technologies like heat pumps and electric vehicles.

Ofgem's concern extends to around a million homes, predominantly in rural Scotland and parts of England and Wales, which still rely on outdated Radio Teleswitch meters. These meters operate using long-wave signals from radio masts, a system set to be phased out with the planned closure of the BBC radio service that supports them by 31 March 2024. However, discussions are ongoing to extend this timeline to mid-2025.

The regulator has set clear expectations: all Radio Teleswitch meters should be replaced with smart meters well before the network's closure date, suggesting a three to four-month buffer period.

"We have written to suppliers to raise our concerns about the slower progress of installations for smart prepayment meters and the potential impact of that on vulnerable households," a spokesperson for Ofgem said.

"Smart meters bring immediate benefits for customers, helping them to access more competitive tariffs," the statement added. "It also makes it easier for suppliers to spot when households might be struggling with bills and offer support such as emergency credit."

Should the pace of smart meter installations not improve, Ofgem warns of possible enforcement actions against suppliers.

Additionally, Ofgem has recently reminded energy suppliers of their obligations to treat customers fairly, particularly regarding installing involuntary prepayment meters. The regulator has emphasized adherence to new regulations governing this practice, with non-compliance potentially leading to fines.

In a related development, over 100,000 residents in 5,000 shared residential buildings across the UK could soon access smart meter technology. This follows a successful pilot by UK energy supplier Alt HAN and Meter Equipment Managers, including SMS, which reconfigured meter rooms in apartment blocks to facilitate smart meter installations. This project also introduced special devices to enhance the range of home area networks integral to standard smart meter setups.

This service is anticipated to be operational by mid-2024, with SMS poised to play a critical role in providing ongoing service.

"Without joint action, there had been a significant risk that thousands of customers were going to be left behind in the switch to a smart meter due to crowded meter rooms," Tom Woolley, smart product and strategy director at SMS said.

"Working closely with UK energy suppliers, and through leveraging our well-established metering and technical installation expertise, we've been able to innovate a way of ensuring that homeowners or tenants previously impacted by this issue will not miss out on the opportunity for smart meters."

This initiative represents a significant step forward in making smart meter technology accessible to a broader population segment, aligning with the UK's wider energy efficiency and sustainable living goals.


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