Energy UK response to Ofgem consultation on supplier smart meter guaranteed standards of performance

Executive Summary

We have previously advocated for smart Guaranteed Standards of Performance (GSOP) as a more effective policy package than hard targets, as they seek to drive positive customer experiences of smart meter installations. Energy UK supports obligations which address the root cause of issues in the energy market by incentivising positive customer outcomes on a proportionate basis.

However, we do not support unnecessary costs being added into the programme which end up on consumer bills. We are concerned that there could be considerable cost implied with meeting some of the standards, as well as in failing the expected levels of service. Ofgem’s draft Impact Assessment underestimates the costs of meeting this set of obligations, particularly with regards to non-operating meter resolutions. Further, the proposals do not adequately consider how the measures will interact with DESNZ’s post-2025 policy framework.

Given the post-2025 policy framework and GSOP proposals address similar issues, we recommend some key changes to the proposals in this response. In their current form, some of the proposals imply costly unintended consequences. For example, the cost of removing meters where it cannot be proven that they are unusable.

As such, some members suggest that implementing the GSOP proposals should be paused until the post-2025 policy framework has been embedded. At this point, it would be proportionate to assess whether there are any systemic industry-wide areas of underperformance, which need to be targeted.

Alternatively, some members suggest the proposals should align with the timing of DESNZ’s proposals, to give suppliers sufficient time to adjust their processes. At the least, the GSOPs start should be pushed to 1 October 2026, to give suppliers six months from the final decision to substantially develop the systems that they will need to have in place to effectively deliver on them. Commercially, they cannot comprehensively begin this process until Ofgem has reached a final decision.

Further, although there are examples where suppliers are subject to enforcement under the licence as well as GSOPs (for example, switching timescales, erroneous switches, and issuing final bills), in those cases the requirements of both align. As noted later, the amount of time given to fix non-operating meters in this instance is not aligned, such that it would be confusing and complex for suppliers to manage.
If Ofgem is minded to proceed with the GSOP proposals, we have provided constructive feedback for necessary improvements in our following response, to ensure they minimise costs of delivery and result in better outcomes for consumers.

Key points on specific GSOPs:

• The costs (meters not operating in smart mode): we are concerned that the current proposals require costly and inefficient deployment of suppliers’ limited workforce in a way that conflicts with the DESNZ post 2025 proposals.
• Issues out of supplier control (meters not operating in smart mode): we strongly recommend that scenarios outside of suppliers’ control should be out of scope, such as where related to DCC. Members agree that such a measure could lead to an increase in costs for all parties relating to arbitrating fault, which industry is not set up to manage, and where currently it is difficult to accurately identify root causes and fixes for non-operating meters. This is not factored into Ofgem’s draft IA.
• Consumer engagement (meters not operating in smart mode): we welcome that the proposals do not require a redress payment where the customer has requested that the meter not operate as smart, or where the customer has taken action that could have prevented a supplier from ensuring the meter operates as intended.
• Repeat payments (meters not operating in smart mode, meter installation availability): this inclusion conflicts with existing regulations, and would be more appropriate to reassess in the upcoming wider review on GSOPs.
• Non-domestic application (meter installation availability): while we welcome that the scope of non-domestic consumers has been limited to microbusinesses, we also recommend that microbusiness customers should be out of scope, or at the least, the timeframes extended to 120 days.