Smart energy meters could allow utilities to ‘overcharge’ more than £50 a year on top of the gas and electricity you use, Money Mail has found.
There are 34.8 million smart meters installed in Britain, with users unaware that industry regulations require meters to have a ‘tolerance level of between +3 percent and -3.5 percent of actual usage’.
This means that the customer could be charged 3 percent more on an invoice or 3.5 percent less on an invoice than the amount used – and this is not a magic trick, but set out in the fine print of the billing to the customer.
According to industry regulator Ofgem, the average monthly energy bill is £153. So with a 3 per cent margin of error, an average home could pay an extra £4.60 per month, or more than £55 per year, which equates to £2,750 over a lifetime paying bills for a long time.
Energy users have written to Money Mail with concerns about the accuracy of their bills and are subsequently charged a fee – up to £192 – if they want a smart meter tested and it works.
Inaccurate: Industry regulations call smart meters a ‘tolerance level between +3% and -3.5% of actual usage’
One in ten smart meters no longer works properly, according to research published by the government last month.
Most of these have become ‘dumb’ and therefore have to be read manually, just like a traditional meter. However, in some cases they have provided wildly inaccurate figures.
Artist Grayson Perry was hit with a £39,000 electricity bill from EDF Energy at the end of last year, instead of the usual £300, due to an ‘erroneous’ smart meter reading.
We asked electrician Mike Redfern-Jones why this could happen. He has been installing electricity meters for four decades, including smart meters since their introduction eight years ago.
Redfern-Jones, based in Denbigh, North Wales, says: ‘There is no reason why electric smart meters shouldn’t be completely accurate.
‘They simply use a digital reader to measure how many kilowatts of electricity are used in an hour.
‘The installed microchip circuit boards should work perfectly without any measurement variation.
‘Only the traditional flywheel gauges contain physical parts that can wear out over many years and where there can be a small difference – and even this can take decades before any differences are visible. My experience is that older devices that go wrong tend to underestimate rather than overestimate usage.’
Energy giants appear to be benefiting from the old rules of the government’s former National Metering and Regulation Agency, which were drawn up more than a decade ago before smart meters were introduced.
It says: ‘Electricity meters are considered ‘accurate’ if the allowable margins of error do not exceed +2.5 percent to -3.5 percent over the entire load range for which the meter is designed to operate.” For gas, the allowable meter deviation is +3 percent to -3 percent.
Suppliers have quoted this charge when customers request bills – and demand up to £192 as a call-out charge if they discover there is nothing wrong with the meter.
Smart meter customer Jon Walker, 73, from Warwickshire, says: ‘We may all have to start paying 97 per cent of our gas and electricity bills to avoid overloading.’
The retired engineer discovered last summer that his gas bill was increasing even though he had turned off the gas.
He called provider Shell Energy (acquired by Octopus Energy last December) in June to report a fault with his meters which had previously worked well when they were installed a year earlier.
“I was told there was nothing wrong with the meter and that if I called them I would be charged £168 if it turned out there was nothing wrong with it,” he says. ‘They acted like bullies.
Risk of overcharging: Customers using smart meters can pay 3% more on an invoice or 3.5% less on an invoice than the amount actually used
So I had a gas engineer friend shut off my gas for a few days. The meter kept showing that I was using gas. Shell then replaced the meter for free and the problem was solved.
‘Initially Shell refunded £200 because I had overestimated the bill, but after I complained again it magically recalculated and said I owed £450. I also received £150 compensation.’
Jon says his annual energy bill was typically £1,800 but was told consumption was ‘about six times as much’ as the previous year due to incorrect meter readings.
Had he not taken his own measurements and called his bluff, the annual bill might have risen to £10,800. No explanation was given for ‘erroneous measurements’.
Jeremy Barrett, 83, is also concerned about the accuracy of smart meters – despite Octopus Energy telling him there is nothing wrong with his equipment.
Overcharged: Artist Grayson Perry was hit with a £39,000 bill by EDF Energy over an ‘erroneous’ smart meter reading
The retired director of a security company from Wimbledon, south-west London, is among those who have to climb a ladder if he wants to take his own measurements.
‘Despite my requests, no one is willing to come and check that the smart electricity meter is working correctly – but my bills have doubled since the meters were installed to as much as £600 a month,’ he says.
Jeremy, once a voiceover artist, says he was also unimpressed when they sent him a £60 electric blanket as a ‘vulnerable’ customer – instead of sending someone to him.
He says: ‘I used to be in the SAS branch of the British Army. I don’t have to fall asleep.’
Octopus Energy says it has received regular remote readings from its meter since installing it in 2020. It adds that it has ‘monitored its energy consumption and can confirm that it is in line with previous years’.
The rollout of £13.5 billion of smart meters started in 2016 and 35 million homes and businesses have had one installed. They account for 61 percent of all meters used.
A key reason why energy companies are keen to install smart meters is that it saves them money because they no longer have to come out to read customers’ meters.
They also come with separate handheld screens that allow customers to see how much energy is being used in near real time.
Octopus Energy said: ‘The tolerance of an accurate smart meter is part of national smart meter legislation – and not just specific to us.’
EDF Energy said the accuracy standards are set by Ofgem. British Gas said all its meters are approved and certified by the Office of Product Safety & Standards. Scottish Power, Eon and Ovo Energy did not respond.
Some links in this article may be affiliate links. If you click on it, we may earn a small commission. That helps us fund This Is Money and keep it free to use. We do not write articles to promote products. We do not allow a commercial relationship to compromise our editorial independence.