Non-Domestic Smart Meter Rollout Post-2025: Areas for further engagement

Consumer Scotland welcomes UK Government’s further engagement around its proposals to universally implement smart-contingent contracts to drive the non-domestic smart meter rollout post-2025. Building on our original response [i], the key points that we would wish to highlight and this response explores in more detail include:

• Consumer code governance arrangements: We remain supportive of UK Government’s proposals for consumer code governance arrangements to be split between the Retail Energy Code Company (RECCo) (monitoring and evidencing supplier compliance) and Ofgem (performance assurance and enforcement action). Ultimately, whatever governance arrangements are settled upon, RECCo and Ofgem must proactively and meaningfully engage with the statutory advocacy bodies (Consumer Scotland and Citizens Advice) to ensure consumer perspectives from across the UK are adequately represented and reflected.
• Case studies to support supplier enforcement: We welcome the introduction of case studies to support proportionate enforcement action that does not exacerbate cost-of-living or -doing business pressures for non-domestic consumers or domestic end-use consumers of non-domestic contracts. The impact of enforcement decisions on vulnerable consumers and in achieving clean flexibility policy objectives must be captured in ongoing monitoring and reporting.
• Consumer guide to rights and expectations: We believe there is value in government producing a guide for non-domestic consumers and domestic end-users of non-domestic contracts on their rights and expectations. Clear and tailored messaging is essential and alignment with other related guidance and arrangements such as the Maximum Resale Price (MRP) will be vital. Consumer Scotland would welcome the opportunity to input into that guide and support government in ensuring information is effectively shared with target audiences.
• Remedial works: We would underscore the need to recognise differences in commercial leasing law in Scotland and how this could impact on responsibility for and undertaking of remedial works. Clear, tailored guidance in this regard is essential.

Do you agree with the revised consumer code governance arrangements set out in the amended Section 5 (Attachment B)? Please provide reasoning to support your answer.

Consumer Scotland broadly agrees with the revised consumer code governance arrangements as set out in the amended Section 5 (Attachment B). As we stated in our original response, we are happy with the housing of the code within the Retail

Energy Code (REC). We are pleased that DESNZ has recognised the importance of, and our request for further consumer perspective input into the monitoring and reporting framework performance. We believe that the statutory advocacy bodies – Consumer Scotland and Citizens Advice – have a vital role to play and we would like that reflected in the schedule. In this regard, we have suggested some changes to 5.4. (b) in the revised schedule as it currently stands as follows:

RECCo shall undertake a public consultation in respect of the proposed approach to monitoring, which RECCO shall proactively engage with the statutory advocacy bodies for energy consumers – Citizens Advice and Consumer Scotland – in addition to taking reasonable steps to bring to the attention of other relevant consumers;

As set out in its original response to the consultation, we would like to see representatives from statutory advocacy bodies being invited to join the REC board to ensure the views of household and small business consumers from across the UK are adequately represented in the development, monitoring and evaluation of smart-meter and other policy proposals. This would reflect the governance model of the Smart Energy Code which has consumer representation at the highest levels of decision-making.

Do you agree that the draft and revised Section 5 of the Retail Energy Code schedule (Attachment B) implements the policy intentions proposed in this document?

Yes, excepting the point on 5.4 (b) raised in the response to previous question, we believe the revised Section 5 of the Retail Energy Code schedule implements the proposed policy intentions.

What are your views on the proposal that government could publish case studies as guidance for energy suppliers?

Consumer Scotland welcomes Government’s proposals to publish case studies which can guide energy suppliers in enforcing smart-contingent contracts. We would also be supportive of avoiding a universal standard for enforcement action. This could lead to negative outcomes for the most vulnerable consumers, including small and microbusiness consumers and domestic end use consumers of non-domestic contracts, especially where they may have very limited or no control over contractual decisions. For example, small businesses who are leasing properties or residents living on a park home site where a landlord or site owner is responsible for managing the contract and has the direct relationship with the supplier.

We recognise that case studies could help drive supplier enforcement decisions that are proportionate and consider the circumstances of non-domestic consumers and domestic end users of non-domestic contracts, particularly those with vulnerabilities, in financial difficulties and/or without a direct relationship with their supplier.

Gathering and making use of data on the location, needs and circumstances of non-domestic consumers and domestic end users of non-domestic contracts could also help improve these consumers’ access to and participation in energy markets, and the targeting of energy bill support.

What scenarios (e.g. with respect to supplier enforcement of smart-contingent contracts) would it be useful to see included in such guidance/case studies and why?

We would be particularly keen to see case studies of scenarios relating to the non-domestic and domestic-end users of non-domestic contracts i.e. where someone else is managing the contract and consumers have limited or no ability to influence contractual arrangements and should not be negatively impacted by any enforcement measures. For example, this could include small and microbusiness leasing properties from a landlord. As our previous response highlighted, FSB research finds that 45% of small businesses do not choose their supplier or contract.[ii] It could also include a residential park home site. Our work on park homes points to the complexities and challenges residents already face with access to affordable and sustainable energy when it is managed by their site owner, in some cases not particularly well, and resulting in poor outcomes for consumers through no fault of their own and with very little they can do to resolve the situation. [iii]

We would also welcome case studies that look at small and microbusiness non-domestic consumers in difficult financial circumstances, in energy debt or experiencing energy affordability challenges. Recent Consumer Scotland research highlights how small businesses and microbusinesses are struggling to secure fair and affordable energy contracts.[iv] The rollout of smart-contingent contracts and any related enforcement action should seek to avoid exacerbating this situation.

What are your views on the proposal that government could require suppliers to consider those case studies in making their enforcement decisions, within the consumer code?

Consumer Scotland believe that government should require suppliers to consider case studies in making enforcement decisions.

We do continue to have some questions about how this will work in practice. We believe it will be important to monitor and report on the levels, nature and impacts of enforcement actions and decisions on an ongoing basis, particularly in relation to vulnerable consumers and achieving clean flexibility policy objectives more broadly. We would want to see this form part of discussions included in the extended consultation period that UK Government has proposed around developing the monitoring and reporting framework.

Do you have views on the proposal that government could publish a non-domestic consumer guide to rights and expectations?

Consumer Scotland supports government or regulatory guidance setting out rights and expectations for non-domestic energy consumers. Trusted, authoritative guidance can address low energy literacy, identified by Ofgem’s 2024 business research showing 53% of GB businesses self-report low energy literacy, and help businesses understand their rights and access redress where problems arise. [v]

What would you like to see included in such a consumer guide for non-domestic consumers?

While the non‑domestic market is diverse, core legal and regulatory principles apply across contracts, allowing guidance to focus narrowly on common, high‑impact issues where standardisation is feasible. Priority topics on smart contingent contracts should include supplier, consumer and landlord responsibilities at installation, supplier obligations and standards of conduct, notice periods, failed appointments, responses to business disruption, and routes to redress and escalation.

Guidance should be particularly accessible for small and microbusinesses, where information asymmetry and risk of detriment are greatest, and clearly reflect differences in protections and redress routes between business sizes, including the scope of the Energy Ombudsman and Guaranteed Standards of Performance.

Ensuring that this guide provides tailored information for domestic end-users of non-domestic contracts will be important, as will ensuring this aligns with other guidance e.g., emerging from Ofgem’s review of the Maximum Resale Price (MRP). Not least because, as our submission to the MRP consultation highlights, there is already a high degree of complexity and a lack of transparency and redress for these consumers in navigating their access to affordable and sustainable energy.[vi]

Consumer Scotland would welcome the opportunity to input into the content for that guide and support government in its dissemination and engagement, particularly given our partnership with advice bodies including Advice Direct Scotland and Citizens Advice Scotland.

Do you agree with the proposal of adding a protection on remedial works to the consumer protection code?

Do you have any comments on the details of the proposed provision, including the fact that it would refer to all works in general, rather than specifying a particular type of works?

Do you agree with, or have comments on, the proposal to add some guidance for consumers into the consumer guide to rights and expectations?

Consumer Scotland supports the inclusion of protections relating to remedial works within the consumer protection code. Differences in commercial leasing law in Scotland, where landlord consent is determined primarily by lease terms rather than statute, can result in delays to remedial works that are beyond a tenant’s control.

Where such delays arise, non‑domestic consumers should not be penalised under smart‑contingent contracts, and suppliers should be required to provide some form of interim tariff offering or services that allow consumers to continue benefiting while approvals are resolved. We support the inclusion of clear guidance on this issue within consumer guides, as it is likely to be a common and high‑impact area of detriment for non‑domestic consumers.

Consideration of some of the potential challenges and detriments that could be faced by domestic end users where a landlord or site owner is managing the contract will be important. 

[1] Department for Energy Security and Net Zero consultation on non-domestic smart meter rollout post-2025 (HTML) | Consumer Scotland

[1]  Ibid

[1] Improving protections for consumers living in residential park homes | Consumer Scotland

[1] The business of being a consumer: Exploring small business consumer experiences and their impact (HTML) | Consumer Scotland

[1] ibid

[1] Response to Ofgem call for input on reselling gas and electricity: maximum resale price direction | Consumer Scotland