Will prepayment customers get smart meter fast tracking?

Lucinda Dann takes a closer look at one of the Competition and Markets Authority's (CMA) proposed remedies that could have significant repercussions on the smart meter rollout.

One of the CMA’s proposals is for prepayment smart meters to be prioritised in the smart meter rollout due to start next year. This is part of the remedy “to facilitate widespread engagement” and thereby increase switching in the energy market.

The CMA found that traditional meters and billing technicalities play a fundamental role in the limited awareness of, and engagement with, switching among consumers. It concluded that prepayment customers stand to benefit more from receiving a smart meter. A smart prepayment meter would facilitate access to a wider range of domestic tariffs, for example.

The CMA has proposed two options, either stopping the installation of dumb meters from a certain point, or prioritising prepayment meters in the general rollout.

In its analysis of the likely impact and ease of implementation of the CMA’s first set of suggested remedies (see “No Pain, No Gain”, left), professional services firm PwC said such a proposal was unlikely to go ahead as the implementation would be difficult. Suppliers would have to change their rollout strategies, and programme complexities that could hold up the entire rollout would be brought to the fore.

It would also be difficult to monitor and enforce the required licence condition, observed PwC’s market experts. The firm concluded that the fact the CMA has asked for alternative proposals on how to engage prepayment customers in its remedy suggests there will be more thinking to be done in this area before a final solution is decided upon.

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