Smart meters, smart energy suppliers – not so smart regulator


U.K. energy regulator Ofgem’s announcement (July 12) of a smart energy metering trial should be taken with a large pinch of salt. This added ingredient may leave you with bad taste, but it is not your palate it was ever intended to please.  
The four winners of the ‘rigorous tender’ as Ofgem’s communiqué proudly announced, are the same old horses (under one corporate name or another) that have been toying with smart metering for the past 30 years.
Their single aim then and now was to reduce costs by disposing of personnel, and smart metering seemed a good idea. This is even more so nowadays with economic structures that allow a fire-by-proxy: applying pressure on subcontractors.

Ofgem’s stated aim of this trial, to check consumers’ reactions to energy information is now laughable. My teenage children know more about global warming, the greenhouse effect and natural resource crisis than the average over 30-year-old. Yet they always prefer to switch the lights on instead of opening the shutters in their rooms; they leave the TV on, especially when they are not watching; they throw their clothes into the laundry rather than putting them back into drawers; and indulge in countless other ways of energy wastage.

Why do they do it despite their excellent education? Because they don’t pay for energy, because they have no incentive to save, and because they don’t fear punishment if they waste energy. That’s why.   

Now the energy companies whose business, let us remind ourselves, is selling as much energy as possible, are looking to find and inform Ofgem of consumers’ behavioral changes in response to smart metering.

Hand me a fraction of the millions awarded to these corporations and I’ll tell you the result here and now. In fact I will tell you anyway: consumers do not bother about their consumption; consumers are only bothered about their bills.  These trials are sure to conclude that smart metering has no influence on consumers’ behavior.

If the corporations siphoned some of their gains achieved by cheaper meter readings towards reducing energy prices, then and only then, would consumers react to smart metering. However, this would mean cheaper energy that in turn, will induce consumers to consume more – and corporations to increase their gain, whilst arguing that “they are doing their best”.

A significant trial should, of course, be independent of energy suppliers. It should measure the use of smart metering as a tool for learning and altering consumer behavior by providing incentives and switching tariffs. Such a trial may not increase utilities’ profits, but are certain to boost consumers and provide environmental gains.

With its favouritism of large corporations, the British Department for Business Enterprise and Regulatory Reform (formerly Trade and Industry) through Ofgem has proved once again that headlines and spin count more than serious actions and difficult decisions.
For good measure I should disclose that my company made a bid for this tender in October but did not pass the initial selection process.