Millions of people could see their energy bills reduced due to changes to smart meters coming in next month. Regulator Ofgem is expected to be granted new powers in May which would allow it to change how smart meters operate by 2025.
Currently most customers with smart meters have a report on their usage sent to their company once per month. However, Ofgem is looking to change this so that data is sent to suppliers every 30 minutes. It would mean your smart meter will send out updates, and change your energy prices, as much as 48 times a day, reports Manchester Evening News.
According to the regulator, this could lead to energy bills which are more reflective of what people actually use. The idea is that the shake-up will pave the way for 'time of use' tariffs, which would charge customers different amounts at peak and off peak times.
Read more: Energy price cap rise: 9 simple things you can do right now to save on your energy bills
Ofgem has previously said surge pricing will lead to savings for customers, as long as they shift their usage to quieter times. But households who use energy in peak times, such as doing their washing in the early evening, could be charged more.
Ofgem is expected to be granted the new smart meter powers in May - so from just over three weeks time - according to a timeline already published by the regulator. The new rules are then expected to be implemented by 2025.
Most households are currently on tariffs that charge a flat rate, regardless of what time you use energy. Some consumers with smart meters can already access 'time of use' tariffs - but they must 'opt in' to half hourly updates. This isn’t a default setting, which is what Ofgem wants to introduce.
Customers who do not want to share this data will have to ask to 'opt out' - but the change won't apply until the bill payer next signs an energy contract. Households with a smart meter will also have to submit a mandatory reading every day, rather than once a month under the current requirements.
In a statement released in February this year, a spokesman for Ofgem said: "This major system upgrade is a significant milestone on Britain's path to net zero. It will enable a more efficient, flexible and greener energy system which will save billions of pounds per year on all consumers' energy bills. Ofgem will work closely with industry to make sure it delivers this major upgrade while ensuring those in vulnerable circumstances remain protected."
It comes after households were hit with a £700 hike to their energy bills from last Friday, after Ofgem increased its price cap for those on typical use. For those on a default tariff who pay by direct debit, the Ofgem price cap has gone up from £1,277 to £1,971 - a rise of £693. Read everything you need to know about the price cap and how it affects you here.
