MISG 30 October 2006 METERING INTEROPERABILITY STEERING GROUP Philip Davies Director of Retail Markets and Environmental Policy

MISG 30 October 2006, Slide 2 Ofgem smart metering review – June decision document “Relying on the commercial incentives of suppliers is the best means of ensuring that where new metering investment is made, it is cost effective and meets customer needs” “Competition is the best means of adequately protecting consumers ” Suppliers are best placed to understand the costs and benefits of smart metering and how to most effectively deploy them.

MISG 30 October 2006, Slide 3 Ofgem smart metering review – June decision document “Need Interoperability so that consumers can switch supplier without having to change their smart meter and suppliers don’t face technical barriers to interacting with smart meters installed by their competitors” “Markets can and often do solve these problems by themselves. However, feedback from our consultation strongly suggests that Ofgem should facilitate these developments…. [this could] lead to faster results”

MISG 30 October 2006, Slide 4 Industry work is underway….  Ofgem welcomes these initiatives  BUT: ERA work, and others, needs to explain how it meets the needs of ALL stakeholders – small suppliers, microgeneration, SMEs. e.g…

MISG 30 October 2006, Slide 5 OObjectives PPromote and support the introduction of smart metering in the competitive retail market PProvide a forum for all stakeholders to have input into the process HHold to account the industry for delivering on schedule FFacilitate delivery of industry-led voluntary agreements, and changes to industry codes and processes, as required Welcome to the Metering Interoperability Steering Group (MISG)

MISG 30 October 2006, Slide 6 What we require at the MISG  Commitment to work within the Ofgem policy framework  Resource commitment outside the MISG to deliver on the detail  Agree objectives and stick to them  Commitment to achieving agreement within timeframe – not just a talking shop!

MISG 30 October 2006, Slide 7 Customers will benefit from interoperability.  Reduce stranding risk  Increase commercial viability of smart meters  Reduce customer and supplier inconvenience  Gain common understanding of the future metering market requirements  Development of self-regulation Other benefits include….

MISG 30 October 2006, Slide 8 Promoting choice and value for all gas and electricity customers