Smart Meters - The Legal Framework

As a means to save costs and reduce carbon emissions, more than 50 million smart electricity meters will be installed in UK businesses and households by 2020. The  rollout means electric company meter installers must come into households and businesses to put in the new meters, the Office of Gas and Electricity Markets released a document entitled Smart Meter Installation Code of Practice or SMICoP. Because a number of electric companies will be rolling out the different variations, the code of practice is designed to ensure all companies meet the same standards when installing the new meters. As of 1 June 2013, all companies in charge of installing them must follow the Code of Practice.

"The guidelines launched today are designed to ensure customers have a positive experience when their smart meters are installed," said Lawrence Slade, Chief Operating Officer at Energy UK in a statement following the SMICoP's release. "The rules are there to contribute to a smooth and successful roll-out of smart meters across the country."

The guidelines were the result of several years of collecting feedback from key stakeholders in the energy field. A steering group met on a monthly basis to evaluate feedback, address customer and energy leader concerns and drafting the policy guidelines before their June release.

Prepayment Clients

The SMICoP guidelines include expectations for clients who will be receiving prepayment smart meters. These are a pay-as-you-go system where clients must pre-pay for electricity and gas. Because the process of adding credits to a smart meter can be confusing, the guidelines say installers must provide customers with guidance on the prepayment functions including getting credit, the topping up process, releasing emergency credit and re-enabling supply.

Energy Efficiency Guidance

Smart meters are designed to communicate with the electric company on a daily basis. The meter sends information on electricity usage as a whole as well as a breakdown of energy usage by appliances, including a heater, dishwasher and lighting. Instead of confusing numbers on an electricity meter counter, customers can view their electricity use in terms of pounds and pence. This visual representation allows customers to track their energy usage and cut back on use, if needed, to help stay in budget.

The guidelines call for electric companies to go one step beyond simply reporting information on electricity usage. Instead, electric companies are instructed to provide energy efficiency guidance to customers. This can include providing information regarding electricity tariffs that may save a customer money. The guidelines acknowledge, however, that a fine line exists between helpful advice and marketing tools. While electric power companies are allowed to market to customers, they also must offer helpful advice that can save customers money.

One of the major commitments is to make no sales or marketing pitches at the installation visit. This commitment is an effort to help consumers feel comfortable with the installation process and focus on learning about their new smart meter and how the meter can facilitate energy efficiency.

Small Business Applications

Smart meter installation also will impact small businesses. While individual consumers will not be charged for the installation, electric companies may charge small businesses for the service. According to the guidelines, electric companies must notify small businesses about anticipated installation costs. The costs do not have to be levied on the day of installation. Instead, customers will be offered the option of paying a portion of the meter installation's cost over the course of several months. This measure helps to make meter installation costs more affordable.

Because the smart meter system is mandated to take place by 2020, small businesses must eventually convert their meter to the smart meter option. However, the small business should have the opportunity to decline a proposed visit from an electric company. An electric company should make an effort to make the "least disruptive" visit to a small business and notify a business at least eight weeks before a proposed installation time. If a business cannot accommodate an electric meter installer during normal business hours, the electric power company should offer off-hours and weekend appointments when necessary to facilitate the installation.

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