Smart Meters Bill (First sitting)

Alan Whitehead Excerpts

Committee Debate: 1st Sitting: House of Commons
Tuesday 21st November 2017 Public Bill Committees

[Dr Alan Whitehead (Southampton, Test) (Lab)]

Q One of the key clauses of the Bill concerns the extension of the time within which licensing of smart meters is tenable to 2023, although it is proposed that the roll-out should be completed by the end of 2020. Do you think there is any significance in that difference of years in the arrangements for licensing?

Audrey Gallacher: It is important that the Business, Energy and Industrial Strategy Committee and the Government maintain sufficient routine oversight over the programme. The extension is to allow that programme to be delivered so that consumers get the benefit. We know that the scheme is due to finish in 2020. There is clearly a question about whether that will happen fully, so it is important that that oversight is retained. We would be concerned about how any future powers are used and that due process is followed, and about all the other attendant requirements around any regulated area.

Bill Bullen: We do not think that the 2020 deadline is realistic, and I reiterate the need for continued administrative powers post 2020. The deadline will not be met, so it is essential that those powers are continued.

[Dr Whitehead]

Q Why do you think that the 2020 deadline is not realistic?

Bill Bullen: I just do not think that the programme is anywhere near the level of completion that it needs to be. The DCC was originally intended to be up and running in 2014, at which point 2020 was perhaps a realistic timeframe. We are now nearly at the end of 2017, and the DCC is clearly not up and running at anything like full capacity. It will just not be possible to deliver the remaining 40 million–plus meters in three years. It is logistically impossible.

[The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Richard Harrington)]

Q Good morning to both of you. Would you care to comment on how you feel that smart meters are transforming the experience for prepayment customers?

Bill Bullen: Business is completely focused on the prepay market. We have nearly 600,000 prepay customers now, and more than 85% of those already have smart meters installed. The prepay market in total is something like 20% of the market—5 million households in the UK use prepay, and about 20% of those already have smart meters installed. There is a very simple reason for that: it completely transforms that product and service for those customers. It has huge value benefits for prepay households, which is why they have adopted the technology more quickly. Until the price cap came in, there were also significant price reductions because prepay smart meters allow people to cut their cost to serve ratio, and therefore they deliver a better price as well as a better product. It is a bit of a no-brainer, to be honest.

Audrey Gallacher: I echo that. We know from a lot of early research done on the Government’s smart meter programme that the customer service benefits go beyond improvements and engagement in reducing consumption. The sheer customer service benefits have been massive. Right now, people have to go outside the house to top up their meter, but with a smart meter they can do that in their home. As Bill says, that has proved massively popular.

--- Later in debate ---

[Laura Smith]

Q How easy and transparent is it? We sometimes say that we are making things easy, but how accessible is the information that is given to customers and how is it being rolled out?

Rob Salter-Church: That is a good challenge. We gather regular information by engaging with Citizens Advice, which is a good source of information if people are raising concerns or complaints about their smart metering installation. As I mentioned before, we also gather information from the smart metering installation code of practice survey. We gather information from a wide range of sources. If we thought there was a systematic problem and suppliers were not being clear to customers about information consent, we would absolutely do something about it and use all the powers that we have to crack down on those suppliers and make sure that consumers are protected. I hope I can reassure you that we have both the practical arrangements in place to get the data and the will to do something if we see that there is a real problem.

[Dr Whitehead]

Q Mr Flett, we heard from previous witnesses that there may well be a hiatus in the roll-out and that vans may go out empty, with no meters. A number of people have suggested that that hiatus may be due to the fact that the DCC did not go live until the very edge of the penalty period in which it was supposed to be fully functional. Even when it went live, it was not fully live; there were a number of workarounds in the report that went out about it going live. What is your view of those severe delays, and what would you say about the DCC’s state of liveness—if that word exists—in terms of the challenges that SMETS 2 will bring us in the near future, particularly with end-to-end testing?

Angus Flett: I can reassure the Committee that DCC is fully operational and ready to scale. If we look at the facts, DCC was born in 2013. Our first release was due in December 2015 and was actually delivered in October 2016—the following year. The latest release, which was due in November, we delivered bang on track. There are subsequent releases to unlock functionality such as prepaid and so on.

We run regular “ready to scale” forums with our suppliers and customers. The forecasts that are coming through from my main customers indicate that I will be doing well over 200,000 installs a week next year, and that number is growing. In fact, one of my main customers issued a press release saying that it was the first to go live with the installation of SMETS 2. We are also putting in place incremental measures to ensure that, as we cut over from SMETS 1 to SMETS 2, we carry a buffer stock of communications hubs so that my customers can ramp down their old stock and ramp up the new stock. We are confident that we can deliver against the scaling requirements.

[Dr Whitehead]

Q One of the issues that has been discussed recently is that getting proper end-to-end testing of SMETS 2 meters—that is, testing of real meters on real walls—over a period of time, which is necessary to ensure the integrity of those meters, has been severely compromised by those delays in going live. After all, a live DCC is the sine qua non of testing SMETS 2 meters. Do you consider that you have been a particular problem in that respect, or do you think the people who are concerned about end-to-end testing of SMETS 2 meters protest too much?

Angus Flett: Testing is essential. This is a UK national infrastructure project and we will not go live without full integrated testing. We use a range of emulators to simulate testing. As I said, the evidence I have from the main customers that are driving installations is that we are on track. The volumetric forecasts that they are delivering to me indicate well over 200,000 installs a week. I do not have concerns in that sense.

[Dr Whitehead]

Q How many SMETS 2 meters have actually been installed so far?

Angus Flett: There are just over 250 out there at the moment.

[Dr Whitehead]

Q Two hundred and fifty?

Angus Flett: Two hundred and fifty installs.

[Dr Whitehead]

Q That is a bit of a shocking number, is it not?

Angus Flett: At this stage it is an acceptable number, as each of my main customers gears up its volumetric installs. As I said, if the forecasts that come through—