Smart meter benefits cut.
The government has revised down its estimates of energy price reductions from installing smart meters. Originally (2014) the expected saving for combined gas and electricity was £26. Now it’s £11. The news comes in a detailed cost-benefit analysis issued 10/11/16 and explained for us by the Sunday Times (£/register).
This is embarrassing.
The government, regulators and suppliers are under pressure to correct overcharging of £1.4 billion a year (Competition and Markets Authority June 2016). Reports of problems with smart meters have been around for some time – the Sunday Times confirmed them through Freedom of Information requests. It quotes the Institute of Directors on implications for customers:
Consumer bills are going to go up to pay for the £11 billion programme but the benefits will go to the suppliers and meter manufacturers. We are sceptical consumers would choose to met the cost of this programme given the full picture.
The CMA says smart meters are ‘a key step’ in the remedies for overcharging (our post last week).
Recently they proposed, then rejected, a lower default price for customers who have been paying high Standard Variable Tariffs for s set period. Citizens Advice and others have proposed revisiting the idea.
This latest problem shows why decisive action is needed to make energy work better for everyone, particularly those on lower incomes.