Smart Meters Could Benefit Energy Firms But Hurt The Vulnerable, MPs Warn
The influential Commons Public Accounts Committee has warned that government plans to install "smart" gas and electric meters in all UK homes by 2019 may benefit energy companies at the cost of consumers - particularly the old and vulnerable.
The new meters will mean energy firms won't have to send staff to people's homes to read them, but their installation will be paid-for ultimately by consumers through their energy bills.
The meters - introduced by Ed Miliband while serving as energy minister in the last government - could potentially save households at least £23 a year, according to a report published by the Department of Energy and Climate Change last November.
Supporters say they will also enable consumers to reduce their energy consumption and take advantage of cheaper off-peak tariffs.
But the findings of the Public Accounts Committee is based on evidence that energy customers may not use less gas and electricity once the meters are installed.
Margaret Hodge MP, Chair of the Public Accounts Committee, said on Tuesday: “Consumers will benefit from smart meters only if they understand the opportunity to reduce their energy bills and change their behaviour. So far the evidence on whether they will do so has been inconclusive. Otherwise, the only people who will benefit are the energy suppliers."
Hodge raised concerns that consumers - not energy companies - will loose out on cost savings because of a lack of market competition.
The committee report, released on Tuesday, said: "We are concerned, however, that past performance suggests that competition does not work effectively in this market and should not be relied on to keep prices low."
The committee also raised concerns that the smart meter programme put the old and vulnerable at most risk of paying more money to install them than they will save in reduced energy use.
The committee report said: "Of even more concern is how the programme will affect vulnerable consumers and those on low incomes. Expecting these consumers to pay for smart meters is of itself regressive, and there is a risk that they may end up paying more through their bills where the costs of installing the meters outweigh the savings they are able to make."
Energy companies would also be able to switch off energy supplies to households without having to enter properties.
The PAC also raised the issue that consumers may not want the meters installed in their homes. The data communications service - the system which would provide the real-time household energy-consumption data to energy companies - was revealed on Tuesday to cost an expected £3 billion. The report found that there would be "significant practical difficulties" in installing this service.
The PAC's findings echo claims by the consumer group Which? last week. Their report on the new meters drew similar conclusions.
Richard Lloyd, executive director of Which?, said: "This report confirms our view that the smart meter roll-out should be stopped and reviewed before the costs escalate. While smart meters themselves can be beneficial, it’s unacceptable for the energy companies to be in charge of deciding costs for this roll-out.