Electricity suppliers failing to make the most of smart meter savings
Energy suppliers are failing to pass on smart meter savings to small and medium-sized businesses. A regulatory change known as P272 is forcing suppliers to bill using smart meter readings, but some businesses may be missing out on the benefits according to Utilitywise, an independent energy consultancy.
Thousands of businesses are already receiving new electricity bills that are based on their actual consumption, not a standard estimated usage profile. However, some suppliers are keeping business customers on fixed rate contracts and failing to pass on potential savings by moving to alternative contract types.
It is estimated 160,000 smart meters will be installed as part of the P272 mandatory change, by the deadline of April 1st 2017.
Jon Ferris, Utilitywise’s strategy director, said: “With the installation of smart meters for businesses now largely complete, energy costs for thousands of businesses are starting to be based on their actual half hourly consumption.
“This will make energy bills extremely accurate – however they could also become a lot more complex. While they will reflect the higher cost of using energy at peak times, some businesses will pay less for using energy during off-peak periods.
“Many electricity suppliers are promoting the benefits of more accurate billing and settlement. Unfortunately some – although I stress not all – are failing to promote tariffs that will reward the efforts that many businesses are already making to avoid peak consumption. Instead, these suppliers are preferring to keep customers on simple fixed contracts.
“This clearly isn’t fair. One of the benefits of installing smart meters is that they promote reducing waste and enable tariffs that incentivise demand management. Failing to provide the opportunity to benefit from shifting demand won’t encourage this.
“All energy companies must pass on these savings if businesses are to feel the full benefit of smart meters. It is not just a case of business savings either, as lower peak demand would also reduce the risk of blackouts. Larger businesses are already reducing consumption by over 1GW at the winter peak.”
“The domestic smart meter programme will involve the installation of 53 million meters by 2020 at a cost of £11bn. The difficulties in making the most of 160,000 business smart meters raises very real concerns for the success of the domestic roll-out.”
For more information or interview requests, please contact:
- Chris Watts, CWatts@bellpottinger.com / 020 3772 2521
- Natalie Tennyson, NTennyson@bellpottinger.com / 020 3772 2527
- Harriet Sloane, HSloane@bellpottinger.com / 020 3772 2665
Notes to editors
P272 is an amendment to the Balancing and Settlement Code, the rules which define the balancing of electricity in the UK market. The amendment requires that meters in the profile classes of 05, 06, 07 and 08 (max demand meters) that are AMR are billed using half-hourly (HH) consumption by 1st April 2017.
Utilitywise is a leading independent utility cost management consultancy based in North Tyneside. Established as a start-up business in 2006, and listed in 2012, it now has an annual turnover of almost £70 million.
The Group has established trading relationships with a number of major UK energy suppliers and provides services to its customers designed to assist them in achieving better value out of their energy contracts, reduced energy consumption and lower carbon footprint.
Businesses large and small rely on Utilitywise for their energy management needs. It works with clients ranging from South Tyneside Bowls and Social Club and the University of Bradford to FTSE100 BAE Systems and AstraZeneca.
In total, Utilitywise has over 27,000 customers. Utilitywise is a UK company quoted on the AIM market of the London Stock Exchange.
For more information, please visit: www.utilitywise.com