Recommendation 19

According to the Department and Energy UK, the third category included around 1.4 million meters that were working at the point of installation but had since lost communication.59 This includes first generation meters, known as SMETS1, that needed to be ‘enrolled’ (in effect, connected) to the central data and communication platform infrastructure to continue functioning when consumers switch suppliers. In June 2023, the Department told us it might not be possible to enrol 500,000 of these SMETS1 meters, in which case they might ultimately need to be replaced.60 Suppliers’ regulatory framework only requires them to take ‘all reasonable steps’ to replace non-functioning smart meters and doing so does not count towards their binding targets, which only cover new smart meters.61 Suppliers consider this leads them to prioritise installation of new smart meters over replacing non-functioning ones they have previously installed. The Department disagrees, suggesting the existence of a regulatory requirement for replacing a non-functioning meter means there is no practical incentive for suppliers to prioritise meeting their binding targets to install new smart meters over replacing non-functioning meters.62 However, Ofgem acknowledges that ‘all reasonable steps’ (to replace non- functioning meters) is a harder regime to enforce than a binding target to install meters.63 56 C&AG’s Report, Key facts, para 13 57 C&AG’s Report, para 23 58 Q 48 59 Q 48; Correspondence submitted by Head of Future Retail Markets, Energy UK, dated 6 July 2023 60 Q 48 61 Qq 15, 34 and 35 62 C&AG’s Report, para 1.16 63 Q 72 16 Update on the rollout of smart meters Energy UK told us that despite the differentiation between requirements suppliers have processes in place to address metering issues and getting meters working is critical to a positive consumer experience. There are also commercial incentives to want to keep meters working. When smart meters are not working the upfront cost of the meter, i