Tuesday 30 April 2019

Ofgem launches smart metering costs and price cap allowance consultation

Ofgem is consulting on its approach to reviewing smart metering costs and allowances in the default tariff cap.

The regulator says it welcomes responses from suppliers and consumer groups, as well as stakeholders and the wider public.

It notes the review is for the purpose of setting the cap, which was introduced on the 1st of January 2019 and aims to protect more than 11 million consumers on standard variable and default tariffs.

The net cost of suppliers providing smart meters is incorporated into energy bills - the 'non-pass-through Smart Metering Net Cost Component' (SMNCC) reflects changes in the cost of installing smart meters since 2017.

As the cost and rate of deployment changes, Ofgem originally only set the non-pass-through SMNCC for the first two cap periods, running up to the 30th of September 2019.

It now proposes to update this model based on the new Smart Metering Implementation Programme Cost Benefit Analysis - it suggests using different assumptions so the purpose of setting the cap is accurately reflected.

The consultation closes on the 30th of May 2019.