Britain’s retail energy suppliers are at loggerheads with the industry regulator Ofgem over the best way to introduce “smart meters” to every home in Britain. Ofgem is pressing for all-out competition for the work to install and monitor an estimated 45m meters over the next decade. In contrast, the Energy Retail Association (ERA) would like to see the work awarded through a series of regional franchises, where meter installers would bid to fit all the meters in a particular area, irrespective of the energy supplier. The government is keen to see the introduction of smart meters as part of its drive to reduce energy consumption. Smart meters, which can be read remotely, enable energy companies and customers to monitor how much gas and electricity is being used, putting an end to estimated bills. They allow customers to choose flexible tariffs and make it easier to sell electricity produced by microgeneration back to suppliers. The ERA argues that its system would provide competition both for the award of regional franchises and for the supply of meters within each franchise. Ofgem is worried the regional franchise system will not provide sufficient competition. “Industry proposals for smart metering would effectively stitch up customers, making sure they have to bear all the costs and all the risks of introducing smart metering,” an Ofgem spokesman said. “Ofgem believes that suppliers should just go ahead and introduce smart meters and not pursue an arrangement which would remove all the competitive pressure on them to keep costs to a minimum for customers.” The ERA has looked at a number of options for introduction but believes the franchise model is the best available. Duncan Sedgwick, chief executive, said: “Replacing the 45m gas and electricity meters across Great Britain is an enormous undertaking, involving visits to every home in the country. The ERA has looked into the various methods of delivering smart meters and considers regional franchises to be the best framework for the rollout. However, the government may have received other proposals which could be of equal merit. “At present, the ERA’s members consider that this model would allow for the best planning, which would in turn minimise uncertainty, inconvenience and costs for consumers. “The exact model for the administration of regional franchises would require further detailed discussions with all key stakeholders, including other suppliers, government and the regulator.” The ERA is keen for the government to give a clear mandate to press ahead with smart meters when it provides its response to its consultation on billing and metering. The government is expected to publish its views in the coming weeks, though it is not clear if it will use that opportunity to settle the row between Ofgem and the energy companies.

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