High Court dismisses challenge to BEIS’ smart meter programme

07 Oct 2019

Utilita Energy Limited v Secretary of State for BEIS

Lewis J has dismissed an application for judicial review of three decisions dealing with the rollout of the Government’s smart metering programme. Since 2011, the Department for Business, Energy, Innovation and Skills (BEIS) has been progressing a flagship policy to ensure that every domestic home has a smart meter by the end of December 2020.

Smart meters are gas or electricity meters which enable two-way communication between the meter at the property where it is installed and the energy supplier. They bring significant benefits to customers and the environment by providing customers with greater transparency regarding their energy consumption in real time, facilitating switching onto cheaper tariffs and encouraging efficient energy use, with the aim of lowering carbon emissions and developing the “smart grid”.

First generation smart meters, or SMETS1 meters, can only communicate with the particular operating system used by the customer’s energy supplier. This means that when customers switch energy supplier, they may lose smart functionality. Second generation smart meters – SMETS2 – all communicate via a single operating system administered via DCC. The universal communications system means that’s SMETS2 meters will be interoperable meaning that customers can switch energy supplier without losing smart functionality and take advantage of innovative services provided by third parties.

It is a central part of BEIS’ smart meter programme to ensure a transition from SMETS1 to SMETS2 meters. Alternatively, SMETS1 meters may be “enrolled” so that they communicate via the DCC single operating system, thus functioning as if they were SMETS2.

Utilita, an energy supplier, challenged three decisions within the smart meter programme on number of grounds ranging from irrationality, breach of A1P1, and breaches of environmental impact assessment duties, the public equality duty and statutory obligations in the Electricity Act and Gas Act. The first decision was the licence obligation for energy suppliers to “enrol” their SMETS1 metres with the single operating system or else to replace them with SMETS2 meters by the end of 2020. The second decision was that any SMETS1 meters installed after 15 March 2019 would no longer count towards an energy supplier’s smart meter “roll-out” duty. The claim for judicial review of both decisions was dismissed on all grounds. Lewis J held that there was nothing irrational, illogical or otherwise unlawful in the Government’s approach, and the Secretary of State had complied with all applicable statutory obligations, including in relation to assessing environmental impact and the public sector equality duty.

Utilita sought permission to bring a third ground of challenge, relating to how BEIS performed its cost-benefit analysis when deciding that Utilita’s brand of SMETS1 meters ought to be enrolled in the DCC single operating system. Lewis J held that Utilita had “not begun to establish that the defendant had made any arguable public law error” so permission was refused.

Anneli Howard, Anneliese Blackwood and Imogen Proud acted for the Secretary of State.

To view the judgment, please click here.