Ofgem proposes extending restricted meter protections

Ofgem is proposing to extend protections for customers on certain types of restricted meters to 2025, in line with the updated timeframe for the smart meter rollout.

Standard licence condition (SLC) 22G relates to protections for non-Economy 7 restricted meter customers who face difficulties in switching tariffs and saving on their bills.

Around four million customers in Great Britain have a restricted, or ‘profile class two’ (PC2), meter. They allow customers to be charged for electricity at different rates, depending on the time of day they use their energy.

While the majority of these have an Economy 7 meter which records consumption separately during a seven-hour night time period, a significant number have other, less common arrangements such as Economy 10 and dynamic teleswitched (DTS) meters. These can make it difficult for customers to switch tariffs.

Ofgem estimates there are currently under 500,000 customers with non-Economy 7 restricted meters in GB, down from 700,000 in 2015. The number is expected to continue to decrease as the smart meter rollout progresses.

A 2016 report by the Competition and Markets Authority (CMA) found that consumers struggled with accessing and assessing information about prices of tariffs available, particularly as these tariffs are not supported by price comparison websites. This in turn made it difficult for them to switch tariffs and save on their bills.

The same issues were not found for customers with E7 tariffs as these customers can choose for a wide range of suppliers and tariffs.

As a result of the findings SLC 22G was introduced, recquiring all suppliers with over 50,000 electricity customers to:

• Make all their single-rate tariffs available to domestic customers on restricted meters, without making switching to these tariffs conditional on replacement of the restricted meter;
• Ensure that domestic customers on restricted meters have access to information on the switching options available to them; and
• The order also stated that consumer bodies (Citizens Advice and Citizens Advice Scotland) would play a specific role and were given the power to request information from suppliers.

SLC 22G has a sunset clause and ends on 31 December this year, the original date for the expected completion of the smart meter rollout. The expectation was that the rollout would remove the barriers these customers face as once they had a smart meter, they would no longer need to change their meter to change the tariff.

As the rollout is now due to be extended by four years following a six-month extension due to Covid, Ofgem is proposing to extend the licence condition until June 2025. The proposals will also include the ability to extend the licence condition as necessary.