Billing complaints can be resolved with smart meters
Last year 60% of all the complaints energywatch received were from consumers with billing issues. Late, inaccurate, infrequent and estimated bills caused serious problems for many families and businesses trying to balance their finances. Many would end up in debt, be threatened with disconnection and forced to use prepayment meters that, in the UK, tend to be the most expensive payment method.
Evidence from other advice agencies suggests the 40,000 billing complaints we receive are only the tip of a very large iceberg.
The growing number of billing complaints led energywatch to submit an official ‘supercomplaint’ to the UK’s energy regulator, Ofgem, in July 2005. We made the case that poor billing represented a market-wide failure, to the detriment of many consumers. Moreover, we asserted that the impact upon business of delayed income streams and high costs associated with dispute resolution could not be positive.
One of the outcomes from the supercomplaint was a recommendation for more sophisticated meters to provide a solution for customers and suppliers alike. Meters capable of being read remotely would ensure timely and accurate bills issued at times to suit consumers’ income cycles. The costs associated with obtaining meter readings when consumers switch supplier or there is a change of occupier would also plummet, as would subsequent dispute resolution costs.
However, billing is not the only driver for more sophisticated, smarter metering technology. In this age of rapid climate change caused by human activity, our use of energy in the home and the workplace is coming under increasing scrutiny, and rightly so. Much discussion has taken place on investment in energy efficiency measures, but less attention has been paid to consumer behaviour. That oversight seems likely to be corrected, however, as a result of the European Union’s increasing focus on potential energy savings from changes in consumer behaviour.
If consumers are expected to change their behaviour they will need information. They need to know how much energy they are using at any point in time, and how much it costs. An inaccurately estimated bill once a year, or even every three months, simply does not match aspirations in this field, and continued poor practice will prohibit consumers from making informed choices about their energy consumption. We need smarter metering technology to provide accurate and regular usage information if there is to be any hope of facilitating and encouraging behavioural change.
Smart meters are a fundamental element in developing an effective, sustainable and socially responsible energy market. My analysis is that the market is not sufficient in any of these areas. My hope for the future is for an energy market that helps reduce carbon emissions, ensures that consumers and suppliers are not embroiled in disputes and prevents people from being thrown into debt, forced to use expensive payment methods and threatened with disconnection. While smart meters are by no means a panacea, they do represent a vital building block for a better energy market.