Only Energy Suppliers Benefit from 11 billion Smart Meter plan

By Sean Poulter

Last updated at 7:53 AM on 17th January 2012

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Putting ‘smart’ gas and electricity meters in every home – at a total cost of £11.7billion – may bring little benefit to customers, MPs will warn today.

Families will have to pay higher bills to fund the Government-backed scheme to have the digital equipment installed by 2019.

And there is no evidence the energy giants will pass on to customers any of the millions of pounds they will save with the introduction of the new technology, MPs say.

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Feeling the heat: Energy Secretary Chris Huhne faces dissent from fellow MPs who oppose the new meter system

Smart meters give real-time information on a home’s energy use and cost, and Energy Secretary Chris Huhne has backed them, arguing they will encourage families to cut back to save money while also lowering carbon emissions.

Energy firms support the technology because it can supply precise meter readings automatically over the mobile phone network, thereby allowing them to lay-off thousands of meter readers and billing staff.

It will also allow them to cut off homes at the click of a mouse.

Consumer groups claim the £11billion plan will be a fiasco and have demanded it is halted and the independent National Audit Office has warned it could be an expensive flop.

Now MPs on the public accounts committee predict the energy giants will not pass back their savings to customers.
Concerns: Public accounts committee chairman Margaret Hodge

Concerns: Public accounts committee chairman Margaret Hodge

In their report published today, committee chairman Margaret Hodge argues the meters are a good idea but says: ‘Consumers will benefit from smart meters only if they understand the opportunity to reduce their energy bills and change their behaviour. So far the evidence on whether they will do so has been inconclusive. Otherwise, the only people who will benefit are the energy suppliers.

‘Consumers will have to pay suppliers for the costs of … smart meters through energy bills and no transparent mechanism exists for ensuring savings to the supplier are passed on.’

The MPs are also worried about the cost to poor families. ‘There is a risk that they may end up paying more through their bills where the costs of installing the meters outweigh the savings they make,’ they say.

A pilot study has found that, after a short time, meters have little effect on the amount of energy used in homes, but they can trigger family tensions. For example, parents argue with teenagers who leave lights on.

British Gas has put 400,000 smart meters in homes and plans to increase this to 1.5million this year. A spokesman said: ‘Smart meters put an end to the frustration of estimated bills and give customers more direct control over their energy use.’

However, consumer group Which? warned that ministers risk the scheme being rejected by consumers. It added: ‘The Government must not write a blank cheque on behalf of every energy customer, especially at a time when millions of people are struggling to pay their bills.

‘While smart meters themselves can be beneficial, it’s unacceptable for the energy firms to be in charge of deciding costs for this. The Energy Department should stop and review this before it becomes an £11 billion fiasco.’


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