Smart Meters Bill

Douglas Ross Excerpts

2nd reading: House of Commons & Money resolution: House of Commons & Programme motion: House of Commons & Ways and Means resolution: House of Commons
Tuesday 24th October 2017 Commons Chamber

[Alan Brown]

I thank the hon. Gentleman for his point. I know that that was alluded to in the previous intervention. Yes, if there is better technology, it makes sense to work towards installing that better functionality. There is another consideration when it comes to extending the deadline. If we are going to be honest about things, extending the deadline will actually make the installation process much more efficient. How much will it cost to ramp up and supply the additional labour that is needed to go from 350,000 meters a month to 1.25 million meters a month? It will take extra labour, extra training, a massive recruitment exercise, and then, lo and behold, all these people are out of a job because the installation period has gone by. There is actually some merit in considering doing this over a longer period, as it could work better for consumers in the long run.

[Douglas Ross (Moray) (Con)]

Just while we are still on installation, does the hon. Gentleman agree that the three big suppliers in Scotland—SSE, Scottish Gas and Scottish Power—seem to be focusing much of their work on the urban areas rather than on the more rural and remote areas, where fuel poverty is a bigger issue? Does he agree that the roll-out should be equidistant across the country, and that that is something we could achieve in Scotland?

[Alan Brown]

I thank the hon. Gentleman for that intervention. I agree with his point. There are also other logistical installation problems, which tie in with concern about how practical this 2020 deadline is. For example, at the moment, many properties in Scotland have gas meters installed in their external walls. Right now, smart meters cannot be installed in external walls. Last week, my office manager agreed to get a smart meter installed. Someone from the company came out and said, “I can’t actually give you a gas meter.”

Smart Meters Bill (First sitting)

Douglas Ross Excerpts

Committee Debate: 1st Sitting: House of Commons
Tuesday 21st November 2017 Public Bill Committees

[Grahame Morris]

Q Can they be used for any other purpose?

Rob Salter-Church: No. We are wholly supportive of the Government taking these powers to ensure an orderly conclusion to the programme.

Angus Flett: The financial governance I have makes it highly unlikely that the special administration will be required. The way I am structured is that I invoice my customers and they are required, under licence conditions, to pay me within five days. I also have the facility to take a month’s worth of my invoicing as a credit balance, so I carry cash.

The way I invoice my suppliers is between 20 and 30 days. I also have a £5 million keep well deed from a shareholder and a guaranteed bond of £10 million that I can draw down on. The special administration is set up so that, in the highly unlikely event that we became insolvent, it could administrate and keep the lights on until another organisation could be found to take us over. The costs of that administration can be recovered back on my customer base. So it is a sensible measure, although highly unlikely to be required.

[Douglas Ross (Moray) (Con)]

Q Our earlier witnesses were speaking about the ways to the roll out and, ultimately, not being able to meet original timeframes. In the report earlier this year, you were looking at roll out and some potential problems with it. The number of installers was highlighted as an issue. Is that still an issue? If we as a Committee agree to a number of things about extending the timescale, will there still be a problem with there not physically being enough people able to do the job?

Rob Salter-Church: The 2020 target for completing the roll-out as set by Government was always going to be a challenge, and it remains a challenge, as was said earlier. One of the things Ofgem has done is put in place a framework where we require suppliers to submit to us a plan for the roll-out, setting themselves annual targets that we can enforce against if they do not meet those targets.

We scrutinise the plans that we see from suppliers; if they say, “We will install x number of meters per year”, we do not just take it for granted that that is going to happen. We require them to show us what that will mean for the installer capacity that you might need. What does that mean in terms of the contracts that you are going to have to sign to buy meters, and so on? We scrutinise that to give confidence that the suppliers have got arrangements in place to make their plans deliverable.

The information you are referring to that we publish is our conclusions, having looked across the piece at some of the biggest risks to the programme, which suppliers must remain focused, laser-like, on managing. Indeed, getting hold of enough installers is one of those issues.

Suppliers’ plans for 2017 are broadly on track for meeting their installation targets at the end of this year. A couple of suppliers are slightly behind, but not significantly so. What that tells me is that, yes, there is a real challenge to get to ’20, but suppliers are pretty much on track with the plans that they have set themselves for how they will meet their obligations.

[Douglas Ross]

Q So the 2016 problems that you reported in June are no longer an issue. Somehow we have been able to attract people to become installers. How has that been done?

Rob Salter-Church: I would describe them as risks that need to be managed as opposed to problems. On the specifics of installers, some of the tactics of suppliers are to think about their recruitment pipelines, and the Government are involved in work with the relevant national skills academy to ensure that training programmes are in place to develop more installers. The reason why we highlighted that as a risk is that we are expecting suppliers to take more and more action to keep managing it. It will be an ongoing risk throughout the whole programme.

[Douglas Ross]

Q When you spoke about the frameworks that these suppliers entered into and the targets that you can judge them against, how are the targets set for the installations in more remote and rural areas? Clearly, in terms of a numbers game, you can do far more installations in an urban area than you can in constituencies like mine in the north of Scotland. Such constituencies and the more remote and rural areas actually have the biggest potential to benefit from smart meters, yet we seem to be at the very tail end of the installation process because we are harder to reach and you can do far less in the same amount of time. What are you doing to ensure that the more remote and rural areas do not fall further behind the urban areas?

Rob Salter-Church: There are challenges to installing smart meters both in rural areas and in urban areas—equal but different sets of challenges that the suppliers may face. It is not necessarily a given that suppliers would automatically choose to prioritise urban areas for installations ahead of more rural areas.

[Douglas Ross]

Q Are you saying that is wrong? It is a complaint that is coming from rural communities. They can see that in the bigger communities—the bigger towns and cities—there does not seem to be a problem getting an appointment to install a smart meter, yet in the more rural areas there is. But you are saying that that is wrong.

Rob Salter-Church: I am not saying it is wrong; I am saying that it is not necessarily the case that rural areas will always be delayed because they are more difficult and challenging. There will be a range of challenges that suppliers encounter. The way that the Government have designed the roll-out policy is supplier-driven or supplier-led, and if certain constraints were imposed on suppliers to install smart meters in certain populations ahead of others, that might add cost and complexity and, overall, become a worse deal for GB consumers.

One of the things that we are doing to ensure that rural communities are not left behind is in relation to DCC’s communication networks. DCC is already required to deliver a network that will cover 99.75% of the GB population. It is also required to look continually at how it can extend the reach of its network to get ever closer to 100%, to minimise the chances that anyone is left behind. DCC periodically has to report to us on the progress it is making to ensure that its network is as comprehensive as possible. I would like to think that over time, as technology develops and costs come down, there will be more and more efficient ways for DCC to extend its network to ensure that all consumers can have the benefits of smart metering.

[Douglas Ross]

Q The 99.75% is a great ambition, but is it still the case that the more remote and rural areas will be at the end of the programme, when the suppliers must get to the 99.75%, because—I am told—it is more difficult to install the meters there than in those areas that will experience the benefits earlier on?

Rob Salter-Church: That might be a question for Angus, in terms of the roll-out and build-out of the network, and where and when it will be reaching different communities in the country.

Angus Flett: We use two technologies, north and south. In the south it is a cellular technology, and that is an established network. In the north it is a radio technology, which gives a higher percentage coverage, particularly for the geographical aspects of Scotland and some aspects of rural areas. You are correct in that the high percentage coverage does not get rolled out until the last part of the programme. However, we have been working with our customers to see if we could speed that up for particular geographic areas. We are also working with Alt HAN, an alternative organisation set up by the Government, to look at that last 1% or 2% and the technologies we could deploy to resolve that. One of the technologies we use is called meshing, which effectively picks up the signal from one house where it is strong and allows that to repeat. So we are reasonably comfortable and confident that we can deliver the coverage footage.

[Matt Western (Warwick and Leamington) (Lab)]

Q I have some quick questions. I am concerned about what I heard in the previous session about the transparency to consumers. I sense that there is no consistency—perhaps you can correct me—between the different suppliers, in terms of information provided to the consumer about the programme, what the customer’s responsibilities are and what the provider’s responsibilities are, such as frequently asked questions and that sort of thing. Can you confirm the situation?

Rob Salter-Church: Suppliers have clear obligations in terms of what they have to explain to their customers. It really, really matters to us that customers get clear information about smart metering—indeed about everything—from their suppliers. It is important that they treat their customers fairly.

In relation to smart metering, suppliers work with the Smart Energy GB organisation to produce common materials and FAQs to make sure that there is clear information for consumers. That information is produced and the suppliers are working to pass that out to individual consumers. There would be potential unintended consequences if either Ofgem or the Government decided that we knew exactly how to speak to customers individually—every single one—and set out very prescriptive rules that suppliers had to follow to the letter. We place clear obligations on suppliers on what they explain to customers. They have clear licence obligations to ensure that they always treat their customers fairly. Suppliers have a programme of work going on, working through Smart Energy GB on common FAQs and information that can be shared with consumers, and they have to do that in a clear way that really engages customers and makes them understand the benefits of smart metering.

Smart Meters Bill (Second sitting)

Douglas Ross Excerpts

Committee Debate: 2nd Sitting: House of Commons
Tuesday 21st November 2017 Public Bill Committees

[Clive Lewis]

Q When we talk about something that is at the heart of the demand side of the fourth industrial revolution, I guess you would expect us to be planning some years ahead to be able to make use of emerging technologies. What you seem to be saying at the moment is that this Bill does not do that. It is quite limited in its purview.

Dr Richard Fitton: Technology developers I am working with now are trying to make that work. That is how savings can be brought about. It helps things like grid smoothing and demand-load shift.

Dr Sarah Darby: I would add that it is important to consider stuff talking to people through the display. When people ask for a smart meter, or when they are getting one, the bit they are really interested in—almost always—is the display. The single most powerful reason people have for wanting or appreciating a smart meter is that they get visibility of their energy use.

The knock-on effect from that is also very important in terms of the future energy outlook. For example, no amount of smart technology will insulate your walls for you. There are still a lot of unsmart things that need to be done to our building stock in this country, for example, that the smart revolution will not actually do.

On the other hand, if smart technology can be used to communicate to people to get them thinking more about what can be done, and if it can be combined with advice and guidance so that they have clearer ideas about what options are open to them—if there is support for the metering in that way—a lot can be done to take us forward. I want to emphasise that aspect of it as well, in terms of communication.

Dr Richard Fitton: We are carrying out that type of work with the International Energy Agency—taking in this data and processing it in such a way that building physics can be incorporated with the algorithm so that we can then say, “These buildings are likely to need some type of intervention to make them cheaper, more fuel efficient and more comfortable for the occupant.”

[Douglas Ross (Moray) (Con)]

Q Dr Darby, in the information you provided you said that it is important to conduct the remaining smart roll-out well rather than do so at speed, and then you gave three main reasons for that. I am not sure whether you were here for the evidence session this morning, but I raised concerns about my own constituency in Moray in the north-east of Scotland, and other more remote and rural areas, where people want smart meters but the installation is not happening particularly quickly.

One of your main concerns about rolling out quickly is that customers will feel pressured into adopting smart meters; yet I have constituents who want smart meters but cannot get them. For example, a village hall, the Houldsworth Institute in Dallas, has had people out to try to get one installed, but there is no mobile phone reception—it is in a blackspot. How do you think your evidence relates to people who want to see the roll-out far quicker, but are hampered because the technologies do not allow it or we do not have enough installations happening in the more remote and rural areas compared with the more urban areas?

Dr Sarah Darby: That would be an argument for paying special attention to such areas and thinking how that could be addressed. It does seem to me that the strength of the programme so far is that it is voluntary, and that the early learning is being done by people who are already well-disposed to it and will perhaps put up with any kind of teething glitches that go on. They will adapt and then, if they are satisfied, will pass the word on to others so that others will want a smart meter too.

If we speed up, the amount of attention paid to the installation process will almost inevitably drop off. There will be pressure on installers just to go into a building, put the kit in and get out, and not to spend time doing the things that customers have said they appreciate about the roll-out so far: having someone who will explain stuff to them and show them how to use the equipment, and having that level of support to the installation. If we lose that through speeding up the whole process, the programme will suffer greatly in the long run.

[Douglas Ross]

Q The concern I am trying to get at is that constituents such as mine will eventually get frustrated with always being at the end of the queue. If we cannot accelerate the process at all and suppliers continue to go for doing mass numbers in more urban areas, we have a real risk that the communities that would benefit the most from these smart meters will always be at the end of the queue. If it takes so long to get to them, we might actually disenfranchise so many people.

Dr Sarah Darby: Yes, they might get turned off.

[Douglas Ross]

Q So you could accept that as being a reason in some cases to accelerate, if possible, without compromising the other elements?

Dr Sarah Darby: Yes—without compromising the programme as a whole.

[Steve McCabe]

Q Do you know what happens to all the old meters? How are they disposed of when we put in these new smart meters, and what happens to the smart meters when they come to the end of their life? Has BEIS issued any guidance on how those should be recycled? I guess I am wondering whether there is a landfill somewhere full of old smart meters or old non-smart meters.

Dr Sarah Darby: You would have to ask BEIS about that.

Dr Richard Fitton: I remember seeing in the trade press that some consideration is being made of recycling existing meters, but I do not know. Again, it is an excellent sustainability—

Smart Meters Bill (Sixth sitting)

Douglas Ross Excerpts

Committee Debate: 6th sitting: House of Commons
Tuesday 28th November 2017 Public Bill Committees

[Dr Whitehead]

Thank you for that clarification, Mrs Gillan. Indeed, in order or not, the conclusion we seem to have to reached is that my hon. Friend is right: this does appear to suggest ways in which Bills that have not been considered on Second Reading in a certain light can simply have their direction changed at a later date by the long title being widened by particular amendments that are forthcoming after Second Reading.

[Douglas Ross (Moray) (Con)]

I am sorry, but I am a new Member and slightly confused. I am hearing positive comments about what the Minister has proposed, but also concerns raised through Wikipedia, with mention of magic and all sorts. Is there not a worry—one that I would have—that this opposition from Labour Members might stop reasonable measures, such as those that the Minister has put forward, coming in the future because the precedent seems to be that Labour will oppose something even though there are good reasons for these proposals and they will enhance the Bill, as I think Members agree?

[Dr Whitehead]

It is not a precedent that Labour will oppose it; it is a precedent that this particular arrangement has been put before us. We are saying that we ought to be clear that this is a precedent. Whatever we may think of the merits of the amendments as they are described, the way of doing legislation in this House may have been significantly altered by what is effectively some form of precedent.

[Douglas Ross]

But it may have been significantly altered for the good of the Bill.

[Dr Whitehead]

The hon. Gentleman could argue that we can dispense with procedure and just get good things through this House. Clearly, that would not be a terribly good idea because of how we need to structure our legislation.

I can see that the hon. Gentleman is a little concerned about the relationship between what everyone in this Committee can agree in terms of the wording of the amendment—

--- Later in debate ---

[Steve McCabe]

I beg to move, That the clause be read a Second time.

I shall be brief. This is almost where my interest in this subject started. When I first came across smart meters, I thought “Hey, that is a really clever idea”. Then, like the hon. Member for North Ayrshire and Arran, I started to attend to stories of people saying that they were being pressed to have these meters and that they were being treated in a fairly cavalier fashion. As I have said at various stages, I felt that public certainty, public satisfaction and, indeed, basic public knowledge was a problem.

New clause 2 is self-explanatory: it calls for a review of public awareness levels and satisfaction with the roll-out. I want to know in particular about the effectiveness of the consultation between the industry and the public. I know that this was not particularly about satisfaction levels—it was more about roll-out procedures—but I found the funnel evidence pretty bamboozling. It did not do anything for my confidence as I listened to that. We need to know how effective that consultation is.

I am particularly concerned that awareness is raised among those people whom we might call vulnerable groups or vulnerable users. It should be a central concern of the Minister that they benefit.

We heard from the hon. Member for Moray during the evidence session that he was particularly concerned, and rightly so, about satisfaction and roll-out in rural areas. It would do no good at all were we to embark on a multi-billion pound project and then discover that consumers in certain parts of the country were getting a poorer deal.

[Douglas Ross]

Does the hon. Gentleman accept, however, that my concerns are about the availability of smart-meter installation—rural constituencies such as my own in Moray seem to be at the back end—rather than about the overall perception of smart meters and their success or otherwise?

[Steve McCabe]

I accept that, although I interpret “satisfaction” to also mean satisfaction with the delivery and benefit of the meter.

What I am asking for is self-explanatory. It will not do us any good if I keep going on about it. I have made the point to the Minister, so he knows why I think it is important.