January 2012 supplier forum meeting considers smart metering developments and the Green Deal

The first issue on the agenda was the most recent developments on the smart metering implementation programme (SMIP). Both DECC and Ofgem have recently issued some pertinent notices and consultations related to smart metering. Members were informed on: the pre-Christmas publication of DECC’s updated SMIP delivery plan that sets out the revised timescales for Phase 2 of the programme: an open letter published on 22 December by DECC seeking industry views on the possible exemptions for small suppliers from some smart meter roll-out licence obligations; Ofgem’s consultation on its final decisions following its review of metering arrangements: and Ofgem’s consultation on the commercial interoperability arrangements for smart meters. Members briefly discussed the current work on the development of a smart meter industry code of practice (SMICoP). There was a general feeling that suppliers should not be permitted to undertake sales activity during installations.

The members were informed about the Cornwall Energy Green Deal Primer, developed in light of the current consultation on the Green Deal and Energy Company Obligation (ECO) energy efficiency scheme, which closes on 18 January. Members noted that the costs allocated to cover the administration fee for suppliers acting as an agent to collect and remit Green Deal payments is proposed to be £3/year/Green Deal plan. This was thought to be a major underestimation of the real administration costs that suppliers will face resulting from participating in the scheme. Other Green Deal issues discussed included the compliance thresholds for the Green Deal and ECO, the inadequacy of the pari passu approach to the remittance of payments and debt and unresolved issues for non-domestic suppliers

Turning to DECC’s publication of its Technical Update on the Electricity Market Reform (EMR) the members were informed of the main points: that National Grid is best suited to deliver the CfD FiTs and capacity mechanism; the government intends to implement the capacity mechanism in the form of a capacity market: and Rocs will be purchased at a fixed price by a central agency from 2027. The main point to note was that the CfD FiTs will be paid for by suppliers. Concerns were raised over the lack of definition of “supplier” in this sense and the lack of clarity on the method for allocating the costs imposed.

Other areas of discussion included:

· Ofgem’s liquidity proposals;

· recent developments on network charging; and

· the revised threshold levels for CERT and CESP for the final year of the schemes.

The next meeting of the forum will be held on 8 February. For queries and comments, please contact us.