Energy companies object to plan to cut consumer bills

Energy companies have been accused of blocking Government proposals to install energy displays in every home despite research showing it will save the average household £130 per year.

By Louise Gray, Environment CorrespondentPublished: 7:00AM BST 20 Aug 2009
The Government is forcing energy companies to install “smart meters” in every home by 2020 as part of climate change plans to improve energy efficiency.
The intelligent electronic electricity and gas readers will be fitted under the stairs like a normal meter and use mobile phone technology to tell the electricity companies how much power is being used so it is no longer necessary to take meter readings.

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At the moment a consultation is out on what kind of smart meters to install and how they can be used to cut fuel bills.
Consumer groups and the Local Government Association want energy companies to include a £15 hand-held device that consumers can move around the house to make it easier to monitor how much electricity they are using at any one time. They can then make cuts, for example by using the washing machine at night or switching off the lights upstairs.
However in its response to the consultation the Energy Retail Association, that represents energy giants npower and EDF, said energy companies should not be forced to issue a display with every meter.
They argued that it would be better to allow flexibility so that the technology can be regularly updated and households that do not want the movable device can receive updates by letter, text or email.
But Paul Bettison, Chairman of the Local Government Association Environment Board, said energy companies are simply unwilling to fork out the initial cost.
“If energy firms succeed in blocking plans to give people in-home energy monitors, millions of households will be denied the chance to cut their fuel bill. Energy displays help people change how they use electricity, cut back and save money,” he said.
“The plan to put a smart meter in every home is good but unless it is accompanied by an in-home energy display, for consumers, it is virtually worthless. What you can see, you can save. Why not give people all the information so they can make better choices about how much energy they use?”
Research by the University of Oxford has found that in-home energy display monitors can help people reduce their fuel bills by fifteen per cent or £130 per annum whereas a recent study by Which? found smart metres alone will only save £1.43 per annum.
"People make bigger savings when smart meters and energy displays are rolled out nationally," added Mr Bettison.
But Garry Felgate, Chief Executive of the Energy Retail Association, maintained flexibility was necessary.
“Energy suppliers are not against display devices. They are against mandating them for all households,” he said.
"ERA and its members firmly believe that energy companies should not be restricted to providing a ‘one size fits all’ device over the next 12 years and should be allowed to offer customers precisely the kind of display they would find most useful. For example, this could be through a mobile phone, a digital TV page, or your PC."
Which? estimates that it will cost households more than £300 over the next 20 years to pay for the rolling out of smart metres as it will be added onto bills. However it will only cost £77 over the same period if energy companies contribute more from the savings they make by not having to do meter readings.