Consultation outcome

Smart meter targets framework: churn adjustment

From:: Department for Business, Energy & Industrial Strategy
Published: 25 November 2021
Last updated: 23 May 2022 — See all updates

Applies to England, Scotland and Wales

Download the full outcome

Smart meter targets framework: government response to a consultation on a churn adjustment

PDF, 453 KB, 39 pages

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Impact Assessment (for the targets framework churn adjustment)

PDF, 336 KB, 16 pages

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Changes to Licence Conditions

PDF, 240 KB, 14 pages

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Detail of outcome

The consultation set out the government proposals to mitigate the impact of smart meter customers switching suppliers (‘churn’) on energy suppliers’ minimum installation requirements for the second year of the new 4-year smart metering policy framework.

Having considered the responses, the government have confirmed the following decisions:

the formula used to set supplier minimum installation requirements in Year 2 of the Targets Framework (2023) will be modified to mitigate the impact of smart meter customers switching supplier. This adjustment will apply to Year 2 (2023) installation requirements only
the amended methodology will define supplier installation requirements for Year 2 of the Targets Framework as the minimum of: i) their targets with a full churn adjustment applied ii) their targets without the churn adjustment applied
the government will consider whether any level of churn adjustment is required in the third (2024) and fourth (2025) rollout years as part of the mid-point review of the Targets Framework, which will take place in 2023

Detail of feedback received

We received 14 responses, from a range of stakeholders:

domestic and mixed portfolio energy suppliers
non-domestic only energy suppliers
a trade body
delivery partners

Most of the responses were from energy suppliers who provided feedback about the policy proposals.

Original consultation

Consultation description

In June 2021, the government confirmed the tolerance levels for the first 2 years of a new 4-year smart metering Targets Framework.

This Framework starts on 1 January 2022 and seeks to drive the consistent, long-term investment needed to ensure that households and small businesses can benefit from smart meters as soon as possible.

The government also confirmed the intention to bring forward proposals on an adjustment to mitigate the impact of churn on energy suppliers’ minimum installation requirements for the second year of the new Framework. We are now bringing forward and seeking views on these proposals.

We propose an adjustment to the way that energy supplier smart meter installation requirements are calculated, to reduce the impact of customer-driven smart churn on installation requirements in Year 2 of the Framework (2023). This will fulfil the intention of the new framework to focus on energy suppliers’ installation performance in order to drive completion of the smart meter rollout.

See the BEIS consultation privacy notice.

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