PAC publishes report on Smart Meters

adminBusiness Electricity, Energy Efficiency, Utilities Market Regulation

The Public Accounts Committee has published their MPs report on the preparations for the rollout of Smart Meters for all homes and businesses.

The Public Accounts Committee (PAC) is responsible for overseeing government expenditures to ensure that they work in the public interest. The Smart Meter rollout is expected to cost £11.7 billion, and the PAC has published a set of 6 conclusions and recommendations that are summarised at the bottom of this page.

The Rt Hon Margaret Hodge MP, Chair of the Committee of Public Accounts, said:

The idea of smart electricity and gas meters is a good one, but [the installation programme] is both challenging and subject to significant uncertainty.

Consumers will benefit from smart meters only if they understand the opportunity to reduce their energy bills and change their behaviour… Otherwise, the only people who will benefit are the energy suppliers.

Consumers will have to pay suppliers for the costs of installing and operating smart meters through their energy bills and no transparent mechanism presently exists for ensuring savings to the supplier are passed on. The track record of energy companies to date does not inspire confidence that this will happen.” (bold added)

Read the full statement by Margaret Hodge MP

Conclusions and recommendations

  1. Consumers will have to pay energy suppliers for the costs of installing smart meters through their energy bills, but many of the benefits will pass in the first instance to the energy suppliers.
  2. The benefits of smart meters can only be fully realised if there is widespread take-up and consumers use them to reduce their energy bills, yet the role of suppliers in helping to achieve this remains undefined.
  3. The benefits from smart meters may not reach vulnerable consumers, those on low incomes and those who use prepayment meters.
  4. Trials so far have been inconclusive about consumers’ willingness to cooperate with the installation process and to use smart meters to reduce their energy consumption.
  5. The data communications service required to link smart meters to suppliers is a complex IT project that may cost as much as £3 billion.
  6. The Department and energy suppliers face significant challenges to install smart meters in every home in the country.

Read the full text of the committee’s Conclusions & Recommendations

Public Accounts Committee
Margaret Hodge MP