Jonathan Brearley
Chief Executive Officer
Ofgem
Dear Jonathan
RTS remedial funding and regional switch-off timings
I wrote to you last year to seek assurances regarding the process for the replacement of RTS meters and the phasing out of the signal that operates those meters. I was largely reassured from your response that Ofgem had the appropriate framework in place to ensure that suppliers and Energy UK were held to account and that any risk to consumers arising from the RTS switch off would be appropriately mitigated.
Remedial funding
One issue that remained an outstanding question at the time of our communication was the availability of compensation mechanisms for households where the replacement of the RTS meter necessitated wider works within the property. This could, for instance, include relatively modest work such as the replacement of cabinetry which had to be removed to access the existing meter. It could also include more complex property rewiring to ensure the new meter is capable of supporting household appliances and heating systems.
While suppliers are not obligated to carry out remedial works of this nature themselves, from our own engagement on the subject we are aware that some are offering to facilitate this on a goodwill basis. Some, for instance, will cover £200 worth of work where required.
Others, however, are not doing so, and for some households the cost will far exceed the amounts offered by suppliers, meaning that consumers are being left to foot the bill for changes they could not reasonably have anticipated. We are aware that Ofgem has been considering this issue, and has also been exploring options with the Energy Savings Trust, with the aim of establishing a scheme to allow affected consumers to claim the costs of remedial works from a central funding pot. The funding is envisaged to come from the Voluntary Redress Fund.
We understand there are complexities to establishing a compensation scheme in a way that complies with UK government procurement rules. However, we are concerned at the length of time it is taking to reach clarity on this matter. This has been under consideration for over a year, and we appear no closer to a resolution. This uncertainty is bad for consumers, who are paying for remediation works themselves and are unclear whether, and when, they will be able to reclaim the costs incurred.
I would welcome an update from Ofgem on:
- when we can expect clarity on whether remedial funding will be available for households where remedial works are required as a result of an RTS meter replacement
- what the process for accessing this funding will be
Regional phase-out timings
Early experiences of the switching off of the RTS signal appear positive. The phasing sensibly started with those areas where there were comparatively few RTS meters, so that appropriate levels of support could be lined up if required, and any learnings could be embedded in future phases. Few, if any, issues have been reported by consumers who still have an RTS meter when the signal in their area has been switched off. And the phase-out has been paused in Scotland over the winter months so that there were no negative impacts during the coldest period of the year.
While positive, we are conscious that now that the process has recommenced and regions with increasing numbers of RTS meters will soon be switched off.
We have for several months been encouraging Energy UK to be more transparent about the timing of the switch off in different regions. This would enable consumer advice bodies and charities to prepare for any negative impacts that arise. There has been an incremental improvement in the last few days, with Energy UK releasing a high level timetable by region,
including the Highlands and Islands in Scotland.
We think they need to go further, and provide a more granular breakdown, for instance by council area. We request that Ofgem engages with key players in this regard, to ensure that organisations that provide support to individual consumers can adequately prepare in the event that the switch off causes supply disruptions for households.
More broadly, we recognise the work that Ofgem is undertaking to ensure an orderly wind-down of RTS. We understand that Ofgem will be pushing suppliers to increase the pace of the meter replacement campaign. This naturally slowed over the winter months, but it is essential that attention is refocused on this over the coming months so that the minimum number of RTS meters remain as possible by the time the signal is completely switched off.
We look forward to continuing to engage constructively with Ofgem on this issue.
Yours sincerely
Sam Ghibaldan