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Ofgem Market-Wide Half Hourly Settlement

IMServ Europe Ltd

Scorpio Rockingham Drive,

Linford Wood

Milton Keynes

MK14 6LY

19th October 2017

Sarah Whenham
Department for Business, Energy and Industrial Strategy

1 Victoria Street,
Westminster
London
SW1H 0ET

Dear Sarah

BEIS Smart Metering Implementation Programme – Consultation on Non-Domestic Smart Metering Policy Proposals

We are sending this letter collectively to express our views on the recent BEIS consultation on non- domestic smart metering policy.

We very much welcome the proposal to give an explicit choice between advanced meters and smart meters
It is critical to customers with advanced meters already installed, that their right to continue with this proven infrastructure is made clear. Any ambiguity around this right to continue with advanced meters will cause confusion in the market, limit the choice of these customers to a detrimental effect and undermine previous investments in advanced meters. The implementation of the New and Replacement Obligation (NRO) will accentuate these issues by creating conflict between supplier obligation and consumer choice.

It is therefore vital that the customer rights in the Electricity Act are made explicitly clear and not countermanded or contradicted by any subsequent policy statements, like the NRO. It must be made clear that any customer can choose to provide their own advanced meter; a request that energy suppliers cannot reasonably refuse, and indeed will count towards the energy suppliers’ roll- out obligations.

Moving onto the detail of the policy implementation as proposed, there is a suggested definition of a‘large consumer’ that determines when a supplier should provide an explicit choice between advanced and smart meters. This definition of a “large consumer” needs to be simple and easy to implement. As currently proposed, many group customers with existing advanced metering portfolios would find themselves below the 3GWh threshold, which clearly means that the proposed threshold is not the right one.

The most important consideration here is that small SMEs and microbusinesses are engaged with the energy market through some kind of meter, be it advanced or smart. They both have their benefits. There are currently around 830,000 advanced meters (electricity and gas) installed across small non-domestic sites1, the deployment of which has been mostly consumer-led. This indicates a well-informed and engaged SME market akin to the I&C market. As such, the current proposal of an explicit choice between advanced metering and SMETS should be extended to any multi-site SME. Single-site microbusinesses, which are similar to domestic consumers and less engaged, can continue to be offered a SMETS meter. Any non-domestic customer who has already moved to advanced metering and wishes to continue to do so, should be allowed to continue on this route. It is their choice after all. And if that customer wishes to make that choice, the energy supplier should not be incentivised by smart metering mandates and rollout targets to unnecessarily sway and bias that choice towards the smart meter option.

Ideally we would suggest that the 3GWh threshold is removed entirely, as no threshold is the simplest to administrate. This would provide a market very clearly driven by customer choice.

If there does have to be a threshold/criteria in place, we would suggest that the definition is changed to any non-domestic customer who currently has an advanced meter installed, or will need one by virtue of having a CT connected meter (where a smart meter will not be installable), or is a multi-site customer. All of these criteria will help to avoid capturing single-site microbusinesses in the proposals. Giving customers who meet these criteria an explicit choice seems a more sensible way forwards.

Further, any advanced meters installed in non-domestic properties under these criteria should count towards the energy supplier’s targets and not be subject to the NRO. This will be needed in order to prevent unnecessary biases appearing in the market

In making these clarifications and a policy decision in this area, time is of the essence. The deadlines for advanced meter installations are rapidly approaching and the readiness of the processes around SMETS2 smart meters to step into the void created by these deadlines is questionable. Any void created by policy will unfortunately be met by a temporary downscaling of installation capability in the non-domestic area. This cannot be the right thing to do for the benefit of anyone and government policy should not be seen to have this unintended consequence just as our companies should be increasing activities to support the rollout of advanced or smart meters to all. For this reason, and to support continued consumer choice in the non-domestic market, we would recommend that the Advanced Meter Exception is amended to co-terminate with the overall smart meter roll-out deadline.

We would expect the proposed legal drafting enacting these proposals to need to change in line with the comments we have made in this letter, and therefore have no comments on the current drafting except that we do not agree with the content of the proposal.

One further important point to note: the consultation dismisses the issue of enabling independent meter operators to provide a full metering service, including SMETS2 meters, to non-domesticorganisations. Paragraph 30 talks of “Smart meter commissioning is achievable with suppliers’cooperation. This not unprecedented, with third parties and suppliers already required to interact inthe advanced meter market.” The difference is that with advanced metering, the meter operatorcan install and commission the meter without involvement from the supplier. The supplier’s involvement is limited to acknowledging the customer’s wishes and instructing the correct metering 1 BEIS, 31 August 2017, Smart Meter Statistics, Quarter 2 2017, Great Britain, available at: https://www.gov.uk/government/statistics/statistical-release-and-data-smart-meters-great-britain-quarter-2-2017 agent. For SMETS2 meters, installation and commissioning is only possible using the DCC connection and security keys that the supplier controls. The supplier is under no obligation to make this interface available to meter operators for them to use. We implore BEIS to reconsider their position on this matter, as this closed approach will undermine long-established competition in the non- domestic market and frustrate the commercial intentions of non-domestic customers.

Yours sincerely,

Steve Brown

Managing Director IMServ Europe Ltd

And on behalf of

Andy Bray, Head of Plan, Siemens Metering Services
Chris Mawer, Business Development Director, SMS plc
Dave Sing, Chief Operator Officer, Energy Assets
Joel Stark, Managing Director, Stark Software International

Roger Sparks, Smart Metering Manager, WPD Smart Metering