Energy and Climate Change CommitteeWritten evidence submitted by Ray Cope

I wrote a paper back in 2001 about the inaccuracies in gas billing. This paper was for Energywatch to carry on the work I had done as a director of the Gas Consumers Council. Unfortunately the paper was ignored and the matters raised have not been followed up. What is more worrying is that billions are to be spent on smart meters and there are no plans to adjust for temperature or pressure when they are introduced.

Since the paper was written GPS has become widely available and it would now be a simple task to record the height of properties above sea level and adjust accordingly. Many meters have a probe that would allow the meter to adjust for temperature variations but for some reason this is not part of the spec for smart meters. Gas billing is a lottery and the problems have been brushed under the carpet for far too long.I hope the committee will find time to address some of these issues or pass them on to another committee for investigation.

The purpose of this paper is to explain in non-technical terms the reasons why there are such serious billing inaccuracies for some consumers in gas measurement. At the extreme margins they could range from undercharging of 12% to overcharging of 14.7%. It is impossible to say with any accuracy by how much domestic consumers are overcharged collectively but we estimate less than 2%. This paper discusses options for putting matters right and in some cases makes recommendations. There are however, issues where the collective views of the industry are needed before it is possible to decide the way forward. This paper also provides a brief history of metering and pays tribute to the sterling work of the former Councils representing gas consumers. They have achieved a great deal but there is still much to do.

Ofgem have recently issued two consultation documents on this subject the first entitled “Energy Billing” and the second “Gas Energy Measurement”. The first document published on the Internet by Ofgem was withdrawn on the day of release and substituted by the current one twenty-four hours later. The reason given for the withdrawal of the first paper was that it contained errors. The wider inaccuracy errors listed in the first document however are closer to our own calculations. We have responded to the document expressing our view that the second paper understates the potential billing inaccuracies. The table below compares all three sets of figures:

The table above lists four component parts of energy measurement and these are dealt with in turn in the following paragraphs. Wet-gas is not covered and will be dealt with separately in a later paper.

Meters

The record of the gas industry on meter accuracy over the past 30 years has been abysmal. Consumers have repeatedly paid for the failures of the industry to come to grips with metering issues. An industry that has a proud record of bringing the benefits of natural gas to millions of homes, and a world leader in technological developments has let consumers down on metering. Listed below is a summary of some of the problems that have come to our attention:

In the early sixties a design fault on the first digital meters U6’s resulted in excessive endplay in the figure drum assemblies. This fault led to meters giving unreliable readings. This problem was almost eradicated by modifications to the design but isolated occurrences have been detected in more recent meters. There is no absolute guarantee that this defect will ·not manifest itself in today’s digital meters.

In the early eighties the then Eastern Gas Consumers’ Council identified the over-registration of leather diaphragm meters. We owe a debt of gratitude to them for their persistence that brought about a replacement programme of 16 million meters. In particular we would like to single out the Regional Secretary of the Council who has saved consumers billions of pounds by carrying out the meter-testing programme. This programme incidentally, was regarded as a waste of money by the British Gas Corporation and was not supported by the then National Gas Consumers’ Council. It is not too late for some formal recognition of this exceptional achievement.

In the nineties Transco provided Ofgas with details of tests carried out on meters removed from consumers’ homes. At that time Ofgem in London had little metering experience and did nothing with this information which had been presented to them. The data was set out in a fonn that was not easy to understand and would probably have continued to gather dust had it not by chance come to the attention of the Regional Manager of the Eastern Office of the Gas Consumers’ Council. His natural instinct in matters of this kind immediately led him to believe there was a hidden problem. After weeks of programme writing and data inputting, the drift problem with UGI black spot meters was uncovered. Another replacement programme was set in train and continues today. This time the Gas Consumers’ Council has saved consumers vast sums of money. Yes, the Regional Secretary of the Eastern Gas Consumers’ Council and the Regional Manager of the Eastern Office of the Gas Consumers’ Council are one and the same person.

In the nineties we saw the introduction of ultrasonic meters manufactured by Eurometer and Siemens. The former British Gas pic had pioneered ultrasonic meters and financially backed an electronics company called “Gill Electronics” to develop a meter. Eurometer subsequently put this meter into production under licence to British Gas plc. There was undue haste with the installation of these meters for reasons best known to the former British Gas plc. The Eurometer soon developed serious faults in service and to a very much lesser degree so did the Siemens model. The faults were called “incrementing” which was a polite way of saying they could record gas that was not bein g used. Yet another overbilling problem. The “increments” were random and could be large or small. What was perhaps the most mystifying to gas consumers and gas engineers alike was the phenomenon of these meters registering when they were not connected to the gas supply! Modification to the design of these meters has eradicated this problem to the best of our knowledge and they now display an amazing level of accuracy—there is virtually no evidence of drift. It is unfortunate that the teething problems with ultrasonics has put them back years and possibly sidelined them for the foreseeable future. Transco no longer purchase them except for a small quantity of Eurometer semi-concealed meters and trial’s with the new Siemens prepayment meter.

Siemens were requested by Transco to find another source of supply of diaphragm meters, in place of or in addition to, UGI for their quantum prepayment meter. Last year Siemens licensed George Wilson to produce the quantum meter. True to form teething problems developed with the new model of G4 meter forming part of the quantum system. A fault on an unknown number of these meters (prepayment and credit) was identified where they would not pass gas. We understand that there was serious concern that this fault could be intermittent. If this were the case pilot lights or burners could be extinguished and then gas could escape where appliances were not fitted with flame failure devices (sometime called flame supervision devices). We should make it clear that these problems were not caused by the Siemens electronics part of the Quantum meter system.

The meter purchasing policy of Transco and other transporters has long term and serious consequences if they get it wrong. One error can so easily turn into millions of errors. We have no data whatsoever on some of the foreign imports purchased by transporters. We would like to be reassured that these inexpensive meters do not drift upwards.

Under the present Gas Meter Regulations, domestic sized meters must register within a tolerance of ± 2% down to 1/50th of the maximum flow rate of the meter. These tolerances apply when meters leave the factory and whilst they are in use. This standard has not changed over the past 40 years. The new proposed Measuring Instrument Directive (MID), which is in its final consultation stages, is likely to change these tolerances in two ways. First there will be a two-staged tolerance for new meters leaving the factory. The minimum requirements provide for a maximum flow rate down to 1/5th of that rate within a tolerance of ± 1Y2% and from this break point + 3% down to l/20th of the maximum flow rate. Secondly the inservice tolerances are likely to be doubled from those when the meter leaves the factory! This would mean ± 3% and + 6%.

The table below explains what all these figures mean to consumers and why Energywatch will fight to achieve better standards under the MID during the remaining consultation period:

Temperature

Gas expands and contracts with variation in temperature. For every 1°C the volume changes by approximately 0.3o/o. All calculations for billing are based upon a gas temperature of 12.2°C but in recent Ofgem research variation between 0°C and 24°C were recorded. The BG Technology meter survey in July 2000 found flow-weighted variations between 1.7°C and 37°C. In the domestic situation most gas is used during the winter months and therefore consumers with meters outside benefit over those with meters inside. The colder the temperature the greater the benefit. Consumers with outside meter boxes living in Scotland where it is generally colder would therefore benefit even more than those living in the south. Where meters are installed adjacent to boilers or radiators consumers will be disadvantaged.

The Siemens and Eurometer ultrasonic E6 meters have temperature conversion software and sensors that could provide temperature converted data in addition to unconverted readings. Current regulations require measurement by actual volume and therefore converted readings cannot be displayed in isolation. The MID mentioned earlier will provide for meters to be designed to measure and display temperature converted readings or as at present to measure unconverted readings. Diaphragm meter manufacturers tell us that conversion devices could easily be added to the G4 diaphragm meters. Past experience has regrettably shown that all changes in metering have resulted in serious teething problems to the detriment of consumers. If conversion devices are to be added to diaphragm meters or software developments to E6’s then proper trials must be undertaken before they are put into service. Siemens are of the view that adequate trials have already been undertaken on their meters. This time the Regulator should take personal responsibility for ensuring that measures taken to correct misbilling do not result in greater inaccuracies!

If the provisions of the MID were to be implemented quickly and temperature compensated meters became the norm , it would be at least 15 to 20 years before all the existing non-compensated meters were replaced. In the meantime it might be practicable to calculate “factors” based upon the siting of meters. A simple grouping might be internal or external with three bands of geographical locations, north, south, and midlands. If the industry were to decide to go down this road it would need to have systems in place to ensure factors are adjusted when meters are resited. Research would be needed to find out if temperature variations occur the same for meters with metal cases U6’s and G4’s and those with plastic cases E6’s and E6v’s.

Pressure

The volume of gas expands and contracts with variation in pressure. The pressure within the meter is determined by the sum of the prevailing atmospheric pressure and the pressure of the gas at the meter inlet. Atmospheric pressure varies according to the height above sea level and the prevailing weather conditions. To compensate for these changes, pressure correcting equipment is available and is used for non-domestic consumers using large quantities of gas. It is too expensive at present for the domestic market.

It is easy to calculate the effect of height above sea level on gas, as it is a simple arithmetic calculation. For every 100 metres the volume increases by 1.2%. The industry must decide if it would be practicable to identify the height above sea level for groups of meter points and allocate the relevant correction factors. Using postcodes and ordinance survey maps would in theory be a possible way of partially adjusting for the inaccuracies due to pressure variations.

It would not be practicable to try and compensate mathematically for changes in the weather. The experts tell us that these climatic changes are unlikely to have any significant impact.

The pressure at the meter governor should be set at 21mbar and remain constant. We have no knowledge of how many meter governors are accurately set or if the meter governors become less accurate over time.

This is an area where research is needed to establish some basic facts. When the accuracy of meters is disputed and sent for testing we wonder if it would be practicable to check the governor at the same time. If research shows this to be unnecessary then perhaps it would be worthwhile checking the governor setting at the time of the meter exchange.

Calorific Values

Gas comes ashore at approximately seven gas terminals all with varying calorific values (CV’s). At points before the gas enters the 12 Local Distribution Zones (LDZ’s) it is measured. There are a number of entry points for each zone all with varying CV’s.

This means that within a charging zone, the CV will not be uniform and some consumers will receive gas of a higher heating value than others. Under present Regulations there is a 1MJ/m3 cap after flow weighting the various inputs, which prevents any consumer being overcharged by more than 2.5%. The diagram below illustrates this point:

Local Distribution Zone

Gas in The above L.D.Z will vary between 38MJ/m3 and 40MJ/m3 but because current Regulation permit an overcharge of up to 1MJ/m3 (approximately 2.5%) gas can be billed at 39MJ/m3 for all consumers.

Although there is a cap on the overcharging of consumers there is no cap on undercharging. It is therefore possible for some consumers to be undercharged by 3% or more and others overcharged by 2.5% in the same zone. This is illustrated in the diagram below:

Local Distribution Zone

Gas in the above LDZ will vary between 37.5MJ/m3 and 40MJ/m3.

Because of the 1MJ/m3 overcharge cap gas will be charged at 38.5MJ/m3 for all consumers. Some consumers will be overcharged by 1MJ/m3 and some under charged by 1.5MJ/m3 (over 3%).

These inaccuracies can be reduced in a number of ways but it is up to the industry to decide which is the best way forward. Below are three possible steps that could be taken:

Increase the number of measuring points and/or charging zones. This is likely to be costly.

Use computer simulations to calculate the value of the gas at various points within the zone (Tlus is already done in Germany).

Develop an energy meter that would compensate for temperature, pressure and CV variations.

The Ofgem consultation document suggests setting up an industry-working group to consider how to take all these matters forward. We fully support an industry group but it must have an equal spread of representatives. Gas supply companies must be encouraged to take part and not just BGT. Above all, an independent person who will not be unduly influenced by Transco or Ofgem economists must chair it.

We have a responsibility to ensure these complex and difficult to resolve issues are not brushed aside. We are uniquely placed to influence suppliers, transporters, meter manufacturers and the Regulator. We will use our wealth of knowledge and experience to do just that.

We will be judged on our success or failure.

January 2013

Prepared 26th July 2013