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Smart Metering and the Power to Choose

The Coalition Government is implementing plans dictated by Ed Miliband, as Energy Minister, to impose smart metering on a national scale directed from the centre after he rejected proposals put forward by Sustainability First in 2006 for a market-led pilot, based on consumer choice. We must revert to a market-led approach, addressing consumers’ concerns over cost and giving suppliers the incentive to invest before the rationing processes, implicit in Labour’s plans, have to be used.

The pre-conditions to success are:

Consumer engagement, including by: Building confidence in the benefits consumer through addressing billing accuracy, fairness and cost, security and control of the meter and data and environmental health concerns about RF. Demonstrating and communicating the benefits to early adopters, both consumer and business, in terms that are meaningful to them, such as the transfer of control from suppliers to customers Ensuring that vulnerable and low income consumers benefit from demonstrably fair pricing and roll-out policies by working with Local authorities, Housing Associations, Health and Welfare Groups etc. Enabling user control, including of the information collected, based on informed consent via devices that are easy to use and understand and can be linked by application designers to heating systems, domestic appliances and remotely operated, e.g., by smart phone. Offering coherent financial incentives including incentives for early adopters and affordable payback schemes to ensure that low income consumers receive genuine cost-savings.

Investor engagement, including by Reviewing the communications strategy in the light of the changing investment climate Improving policy co-ordination between DECC, DCMS, DEFRA, DCLG, perhaps using the PSN team and LGA REIPs to facilitate the sharing of infrastructure and operations costs Improving information exchange between Ofgem and OfCom, at all levels, pending the creation of a merged Infrastructure Regulator, as in Germany. Encouraging early investors by facilitating market-led roll-out among those most likely to benefit and easy to reach communities as business parks and social housing operations and their tenants . Effective routines for reducing the cost of churn to those taking up-front investment risks via independently policed routines which recognise the residual value of the smart meter.

Inter-operability standards, including for security and resilience HMG should actively support UK inputs to the relevant national and international bodies on a cross- departmental basis so that these can be used to reduce cost and secure export markets. The data and communications networks must be two way, between suppliers and customers, part of the Critical National Infrastructure, secured and encrypted for resilience as well as privacy, including for tamper resistance to reduce the risk of abuse by customers. More work is needed in this area. The standards should link to those for the “Smart Grid” which will make use of the data from smart meters to help reduce the generation of unnecessary power. This requires a separate study

We do not suggest changing the commitment to the roll-out of smart meters. The route and timetable have, however, changed over time. The economic climate has changed. Pressures on customer (business as well as consumer) budgets have increased sharply since Conservative policy was last published as part of the “Rebuilding Security” policy document. It is also important to remember that smart meters are not an end in themselves. Their value depends on ubiquitous broadband, smart grid and smart infrastructure so that we can all make effective use of the information they generate.

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