Ofgem mulls March deadline for suppliers to join DCC
Ofgem is considering if it needs to put nine suppliers in the naughty corner for not joining its smart meter all-seeing eye. Selectra brings you the details.
What could Ofgem order suppliers to do?
The energy regulator is consulting on issuing a final order to the firms for failing to join the Data Communications Company (DCC).
Ofgem’s mooted final orders would demand they become DCC users by the end of March.
The DCC is a centralised data hub for the energy sector. Its official job is to enable the collection of data from the UK’s smart meters for suppliers, network operators and energy service companies.
Any company failing to obey the command would be prohibited from taking on new customers until it complies.
The companies facing Ofgem’s big stick are:
- Ampoweruk Ltd
- Better Energy Supply Limited
- Daligas Limited
- Enstroga Ltd
- Entice Energy Supply Limited
- Euston Energy Ltd (trading as Northumbria)
- Green Energy Supply Limited
- Symbio Energy Limited
- UK National Gas Ltd.
Why is linking up with the DCC an Ofgem requirement?
The much-delayed and problem-plagued smart meter rollout that the public never really asked for is still chugging along.
However, Ofgem is continuing to deal with issues left over from the beginning of the project way back in 2011.
Smart meters and not-so-smart meters
First-generation smart meters, known as SMETS1, are able to send energy consumption data to suppliers and promised benefits like reducing bills, ending fuel poverty and encouraging renewable energy use.
Unfortunately, when they were commissioned bureaucrats failed to set a universal format for customer data. This meant many suppliers’ meters send proprietary information only they can read.
So, if you decide to switch to a cheaper supplier, in many cases the data is useless to your new company and, to all intents and purposes, your meter reverts back to providing the basic functionality of old-school “dumb meters”, which seem less “dumb” by the minute considering this standards debacle.
SMETS2 meters were introduced to remedy this huge bungle and were designed to upload data via the DCC’s infrastructure. In theory, this means that your smart meter will continue working as promised whatever supplier you’re with.
The government initially wanted every household to have a smart meter installed by 2019, then by 2020.
This deadline was later softened to an official instruction that suppliers “take all reasonable steps” to at least offer smart meters to every customer by the end of 2020.
Ofgem also wants all SMETS1 meters hooked up to the DCC, which all suppliers were supposed to have done by November 2017.
Customers who already have a DCC-connected smart meter installed will lose the “smart” features if they switch to any of the naughty nine and will have to provide manual meter readings and miss out on other supposed benefits of the programme.
The regulator said that the nine were causing “consumer detriment and could undermine consumer confidence” in both the smart meter programme and in the process for switching suppliers.
The government promised smart meters would bring many advantages, but the reality is underwhelming.
The technology uses a mobile phone-like wireless network and its one-size-fits-all approach fails to account for the variety of geography and architecture around the country.
Many people in rural areas have found that their smart meters can’t even connect to the network due to poor coverage, a problem mobile users in the countryside understand all too well. Likewise, there are often blind spots in buildings which prevent smart meters from working properly, even in cities.
The gadgets were supposed to allow energy users to reduce bills by giving a real-time readout of power usage on wireless displays. In practice, research shows most people don’t monitor their electricity or gas consumption closely enough for this to happen.
People might adjust their thermostats a bit or turn appliances off instead of leaving them on standby, but most other usage follows set patterns dictated by our lifestyles.
Smart meters may even allow suppliers to implement a surge-pricing model which would mean customers pay more at times of high demand. Uber Energy anyone?
What happens if providers don’t meet the deadline?
A similar final order was given to Avro Energy in 2019, but was withdrawn when the supplier complied with Ofgem’s instructions.
If any of the nine companies refuse to enrol with DCC, Ofgem threatens to hit them with its biggest stick - it said failure to comply could “result in licence revocations” which could lead to further energy provider closures.
The regulator is consulting with stakeholders on the final orders until 3rd February 2020 after when it will decide what action it will take.