UK Gas and electricity suppliers have a duty under their gas and electricity supply licenses to inspect their customers‟ meters at least every two years unless Ofgem consents to other arrangements. British Gas has asked Ofgem to consent to a more targeted regime for meter inspections and a minimum inspection period of five years for all meters. British Gas considers that its new system for meter inspections would increase efficiencies of meter inspections and maintain the current level of customer protection afforded by the current two yearly meter inspection requirements.
Ofgem has asked for input on whether the changes proposed by British Gas would be in the interests of consumers, to inform Ofgem‟s decision on whether to consent to the new arrangements. It also seeks input on potential conditions that we could impose on British Gas to ensure that consumers are protected under the proposed new arrangements.
Ofgem also proposed to review the regulatory metering inspection framework more generally. The review would identify if any changes are needed to the existing rules to ensure consumers continue to be appropriately protected in the context of the mass rollout of smart meters and to ensure consistency with the principles of better regulation.
British Gas’s request for changes to its meter inspection license obligations.
The gas and electricity supply licenses set out the obligations that apply to suppliers operating in the gas and electricity markets, including certain obligations in relation to two yearly meter inspections. The scope of the two yearly meter inspections primarily focuses on safety but also includes theft detection and meter reading frequency.
These obligations were reviewed as part of the supply license review in 2006 during which Ofgem considered that the current obligations may be overly prescriptive.
The Health and Safety Executive has considered British Gas’s risk assessment and have confirmed that they do not object to Ofgem consenting to alternative arrangements, subject to British Gas complying with certain conditions.
The government has decided to rollout smart meters, which will require over 50 million traditional meters to be replaced. Smart meters will reduce the need for suppliers to visit consumer premises as the meters will be capable of being read remotely. The Department of Energy and Climate Change (DECC) business case has identified £2.7bn of benefits associated with avoided meter reads / inspections.
The regulatory framework and market for the provision of metering services will be subject to significant changes to accommodate the rollout of smart meters. Ofgem has conducted a Review of Metering Arrangements (ROMA) to support the transition from traditional to smart meters to protect consumers and provide for an orderly and efficient transition.