A smart meter records the exact usage of energy and communicates it to a supplier for accurate billing; meaning a customer is billed for actual [A] (not estimated [E]) energy used.
Accurate billing means customers only pay for the energy used. Smart meters ensure a customer will avoid incurring a large debt or credit at the end of a contract due to estimated billing. If a customer is in debt when a contract ends, they have two options:
– Clear the debt; although this can be difficult or impossible for the customer, or
– Sign another contract (to include the outstanding debt) with the current supplier.
Ensuring a customer is in debt at the end of a contract is a questionable tactic used by energy suppliers to prevent customers leaving easily and, adding insult to injury, tying them into rates highly unlikely to be the best available.
If a customer finds themselves in credit, they will be due a refund. Although this is better news, the energy supplier has benefitted from an interest-free loan at the customer’s expense.
Smart meters ensure incorrect billing is avoided, allowing a customer to easily leave their incumbent supplier for a competitor offering better renewal rates (once the contract expires).