Energy Action Fuel Poverty Conference Smart Meters - Tariff Benefits for Fuel Poor Choosing the Right Supplier Cathy Mannion 6 th October 2014

Current Regulatory Framework CER duty to protect energy customers Supplier Handbook Customer Charter, Marketing & Sign Up, Customer Billing & Disconnection, Complaint Handling, Vulnerable Customers, PAYG & Budget Controllers, T&Cs Annual Customer Survey Market MonitoringPrice Comparison Accreditation

Average Domestic Bills – August 2014 Highest savings can be made by customers switching from standard plans to discounted plans (i.e. by paying by direct debit and availing of online billing). 3 Annual Average Urban 24hr Electricity Bill, August 2014, 5,300kWh annual consumption SupplierStandard ElectricityDirect debit & online billing discount A€1,246€1,101 B€1,193€1,093 C€1,211€1,058 D€1,228€1,075 E€1,348Na F€1,348Na Annual Average Domestic Gas Bill, August 2014, 13,800kWh annual consumption SupplierStandard GasDirect debit & online billing discount A€979€954 B€993€926 C€979€929 D€979€855 E€985€854

What is a ‘smart meter’ Existing Meter  Manually read up to 4 times a year  Estimation used where readings don’t occur  Customers have little sense of actual usage  Switching to prepayment requires new meter 4 Smart Meter  Read automatically every day  No more estimated bills  Allows real time usage information to be presented in the home  Allows new pricing based on Time of Use  Prepayment open to all

 Roll out smart meters – electricity & gas  Mandating ToU Tariffs - all electricity customers  Mandating energy usage statements  Mandating IHD devices – all electricity customers  Enabling broader and easier access to prepayment services Decision on National Rollout: July

Solution Overview

National Smart Metering Programme Today2007  National Trials into Technology & Customer Behaviour 6000  Av. electricity usage savings of 2.5% overall & 8.8% peak reduction

We are rolling out smart meters to all customers..and mandating time-of-use tariffs as the norm, because ToU has been demonstrated in trials and focus groups to be beneficial to consumers The Journey

But it is important to understand the potential distributional impacts..and focus on how to make it relevant to consumers, and to retailers Challenges of migrating to TOU

Customer Risk  In theory, smart meters can reduce supply costs, energy use and bills  In practice, this can only occur if consumers make good choices  Two surveys of UK consumers who switched among simple two-part tariffs for price reasons: Less than 20% chose lowest cost provider Less than half the available gains were made About 25% switched to a higher cost supplier  Time Of Use Tariffs must be introduced with care to allow consumers save money  New Statutory Instrument to allow CER mandate tariff structures  CER will develop tariffs working with industry and customer representatives

Thank You Cathy Mannion