Phone companies likely to usurp role of meter companies


October 4, 2011 – An international consumer poll conducted by Ernst and Young determined that phone companies, retailers and even banks are in a position to usurp energy companies as the main providers of the UK’s smart meter rollout, after a major new survey revealed that consumers believe they will prove better at providing the technology than conventional energy firms.

Power and utility companies are seen as a having an "impersonal and transactional" relationship with their customers, who are more likely to turn to the technology and telecoms industry for the smart technology needed to make the most out of the new meters, a new report from Ernst and Young will say today.

The report – based on interviews with 75 executives at power and utility firms, as well as consumers in 13 countries – reveals a major disconnect between energy company plans to roll out smart meters and consumer willingness to allow them to do so.

The surveys found that energy executives believe consumers trust them to manage the planned rollouts and will be happy to receive smart grid services that allow them to purchase cheaper energy during off-peak periods.

But while customers expressed excitement at the prospect of receiving smart meters, many questioned the motives of energy firms’ involvement in the rollouts and failed to understand why power and utility firms would want to provide them with tools to reduce their energy bills.

They also signalled that they had greater levels of trust towards technology and mobile phone firms, several of which are working on plans to break into the smart meter market.

Richard Postance, advisory partner in Ernst and Young’s power and utilities division, said the report, along with Chris Huhne’s call to deregulate the energy market further, should serve as a "wake-up call to the UK’s leading energy firms".

"The lack of public trust in energy companies… combined with technological convergence, means that firms with strong relationships with customers, expertise in managing their data and a heritage in supplying innovative technology have a unique opportunity to enter the energy market and provide high-value services and products from adjacent markets," he said in a statement.

However, Postance added that it was not too late for energy companies to transform their relationship with consumers.

"Smart technology puts unprecedented power in the hands of consumers to manage and control their energy use. In time, this will fundamentally shift the balance of utility-customer relations," he said. "It seems the era of a one-way relationship – where a utility delivers energy to domestic consumers – is over. Power and utility companies need to adapt now."