Governments and/or regulators have frequently mandated utilities, to install smart meters. These well-considered and well-meaning decisions are obviously good for the metering industry that is able to sell millions of meters for each mandate. This author’s question is: is a mandated rollout good for the customer? The question is not whether smart meters are good for customers, the question is – does the mandate benefit the customer?
The very fact that the government has placed a legally binding obligation makes utilities defensive. They begin to take the smart meter programme as a cost and, like all costs, the cost of the smart meter programme must also be minimised.
Every mandate has an associated benefits case. Since the utility is focusing on costs, it rarely ‘owns’ the benefits case. This attitude is very different from other programmes that the utility runs off its own bat. In such cases, delivering the benefits of the programme is the key focus, and programme managers ‘own’ that benefit delivery.
The mandate also means big risks to the utility. New smart meter technology is a technical risk, all meters to be changed in a short period is a schedule risk, meters being the utility’s cash register is a revenue and cash flow risk, getting the programme wrong is a financial and reputation risk, delays are a regulatory risk.
All in all, the mandate presents a very risky cost centre with no ownership of benefits.
The utility’s executive and programme teams react accordingly. They want to see costs minimised and risks eliminated. This attitude reflects throughout the programme: the way in which contracts are structured, the way the programme….