Is our desire for cheaper energy prices driving prices upwards?

Premier_2

I've just had a meter reader call today and got to thinking...

When I was a lad and everyone bought their gas off British Gas and their electricity off their respective electricity board, once every three months an appointed meter reader from the respective company would start their day at one end of a street, pen & paper in hand, and work their way along reading everyone's meter as they went.

Within about 20 minutes they had completed the whole street and moved onto the next. (like a postman does today). Cost in todays terms, about £5 for the whole street.

For those not in at the time, the meter reader would leave a card saying they would return in, say 10 days time, and do the same knocking on those doors that they were unable to gain a meter reading from on the first visit.

Today, the meter reader seems to spend 95% of their time in a van travelling from one customer to another. As the meter reader had obviously come just to my address (she parked directly outside) I asked how far she had travelled to get to me - she implied about 5 miles! She seemed to imply the next person she was going to visit was a further 5 miles away.

I would guess if she's lucky she could read about 1 meter every 3/4 hour at best, even with her speedy, hand computer to read and record the meter. At this rate it must cost about £10 a visit per property at least!

Now I realise things are more complicated today with the numerous energy suppliers who may like to bill at differing dates. But most energy suppliers outsource their meter reading nowadays - which leads to further opportunities to save if implemented correctly. I've recently changed suppliers and my new energy supplier uses the same meter reading company as the old one did; in fact the same meter reading company that both the previous electric & gas suppliers (which were different) used to use.
When the meter reader came today to read the gas meter, would she read the electric meter too? Of course not - not on her jobcard/computer for today! (Meter currently needs reading according to the meter reading company's correspondence)

Now, with the aid of computers & communication improvements today, you'd have thought it would be possible for a meter reading company to schedule when meters should be read rather than energy suppliers sending readers miles to their next meter wouldn't you? I don't think a meter reader needs much skill to be able to read both gas & electric meters do they, and based on the typical wage paid (barely above minimum wage) their employer obviously doesn't think so either.

Then there's the other cost saving measure everyone seems to be doing; switching supplier. How many people are employed, and paid by us the customer, just to handle all these new account/tariff changes that are occurring?

Are we all responsible for driving up costs in our desire for lower prices?

DGJsaver

Whats our desire to get lower prices got to do with it ?

We dont decide prices do we , we just chase the cheapest

mech_2

I don't think that meter reader was representative of the industry as a whole.

Google found this for me: http://www.npowermediacentre.co.uk/Content/Detail.asp?ReleaseID=708&NewsAreaID=2

Ignore the headline story, I'm just interested in their statistics in the "Notes to editors" section. This article is 2 years old, but the figures seem unlikely to have changed much in that time, IMO.

22 million meter readings a year plus 600,000 meter installations take 14 million vehicle miles. Average miles per trip would be 14 divided by 22.6 making about 0.62 miles.

1000 staff (that includes office based staff and the guys installing meters, but we'll ignore that) doing 22 million meter readings means 22,000 meter readings per person per year. A 40 hour working week times 50 weeks a year would be 2000 hours. Or 120,000 minutes. This would suggest 5.45 minutes per visit rather than 45.

At a rather slow average speed of 15 miles an hour (7 miles per hour seems unrealistic to me, Premier) each of those employees spends 933 hours a year driving. Less than 50% of their time, not 95%.

Let's say they get 33p per mile travel expenses and 13K a year before tax. That's 17.62 million pounds. Let's say that covers 5 million households. This is a complete guess as we don't know from that page how much of NPower's meter reading is outsourced and carried out by other agencies. Neither do we know how much meter reading NPower Meterplus carries out for other energy companies. 5 million seems like a low figure to me as that means an average of 4.4 meter readings per household, but anyway... £17,620,000 divided by 5,000,000 is £3.52 per customer. Probably less IMO.

So in conclusion I don't think meter reading contributes to our bills by an awful lot. This is probably why smart metering continues to be so slow to materialise.

On the other hand, customers switching suppliers is something for which I can't estimate the costs. But remember 40% of people have never ever switched.

Premier_2

Thanks mech, that's an interesting article.

Whilst my experience may or may not be typical, the figures I quoted were actual. You appear to have made some sweeping assumptions in your post.

95% in van time was based on the fact that this meter reader spent about 1 minute out of her vehicle in order to read my meter. Assuming she did likewise at the next reading that would be about 2.5 minutes in total for 2 meter readings. 2.5 minutes out of a total 45 minutes is about 5%.

She wasn't actually travelling all this time, she seemed to spend some time in her vehicle after reading the meter playing with her hand held computer. I've no idea what she was doing, perhaps sending the reading? More likely getting the address for her next appointment and possibly plugging the data into a sat nav device?

Also, I'm not located in the middle of nowhere, I live in the centre of a huge conurbation. If you lived where I do, you'd realise 45 minutes to travel about 10 miles across town is very realistic during the day, bearing in mind not all that time is spent travelling.
As an example, average road speeds in London is currently claimed to be just 10mph.
Source: http://www.thisislocallondon.co.uk/news/topstories/display.var.804876.0.london_cars_move_no_faster_than_chickens.php

If, as you interpret, meter readers are averaging a reading every 5 mins or so, and bearing in mind they have to travel to & from the actual location, this would imply meter readers do go from house to house as they did in days gone by.
(As you say, not all 1000 employees are meter readers, some are office based personel which would imply it's even less than 5 mins)

Has anyone seen this recently? I've certainly seen this with, for example, water board meter readers, but can't say I've noticed this with gas/electricity meter readers - in fact it would be true to say I have seen on many occassions where they just go to a single address before jumping in their van and going elsewhere.

Perhaps it's just my experiences, or unusual about the town I live in?

Cardew

Premier wrote: »

Then there's the other cost saving measure everyone seems to be doing; switching supplier. How many people are employed, and paid by us the customer, just to handle all these new account/tariff changes that are occurring?

Are we all responsible for driving up costs in our desire for lower prices?

I personally think that this is a huge, and avoidable, overhead and have been posting on this issue for a long while, viz:

Whilst not making a criticism of you for taking advantage and cashing in, it just demonstrates the stupidity of a system that allows firms like Quidco and the comparison websites to operate.

These firms cream off £millions in commission, as well as the Utility Companies having to pay for huge numbers of staff the handle people exactly like yourself switching suppliers after being encouraged to do so by these firms.

Who do you think pays for all this expense?

Of course it is us - the consumer - that pays in higher prices

So far from keeping prices lower, it has had, and will have, the opposite effect and raise prices.

I look forward to the day when these parasitic firms like Quidco and the comparison websites are put out of business.

I also believe that the ability to switch suppliers, often simply to chase commission, is one of the major reasons why 'smart metering' is not happening.

It is unreasonable to expect companies to invest the £millions(£billions?) in the technology to remotely read meters for their customers, when the customer will not stay with that company.

Until this is sorted, we have the same meter reading procedure that my great grandparents enjoyed - albeit with a hand held computer instead of pencil and paper.

mech_2

Premier wrote: »

Thanks mech, that's an interesting article.

Whilst my experience may or may not be typical, the figures I quoted were actual. You appear to have made some sweeping assumptions in your post.

They are generalisations, but they are based on actual figures. I think I made fewer assumptions than you did. Though it does appear you didn't quite mean what you actually said.

95% in van time was based on the fact that this meter reader spent about 1 minute out of her vehicle in order to read my meter. Assuming she did likewise at the next reading that would be about 2.5 minutes in total for 2 meter readings. 2.5 minutes out of a total 45 minutes is about 5%.

But the 45 minutes figure is guesswork.

She wasn't actually travelling all this time, she seemed to spend some time in her vehicle after reading the meter playing with her hand held computer. I've no idea what she was doing, perhaps sending the reading? More likely getting the address for her next appointment and possibly plugging the data into a sat nav device?

Also, I'm not located in the middle of nowhere, I live in the centre of a huge conurbation. If you lived where I do, you'd realise 45 minutes to travel about 10 miles across town is very realistic during the day,

10 miles in 45 minutes is 13.33mph. I could probably do that on a bicycle.

You said 5 miles between customers. The 5 miles to the next meter reading belongs to the time allocated to the next customer. 5 miles in 45 minutes is 6.67mph.

bearing in mind not all that time is spent travelling.

Well that's not what you implied originally.

As an example, average road speeds in London is currently claimed to be just 10mph.
Source: http://www.thisislocallondon.co.uk/news/topstories/display.var.804876.0.london_cars_move_no_faster_than_chickens.php

Central London where only 10,000 or so people live. What about the suburbs where millions of people live? After rush hour and before the school run starts most of the roads are clear here. Away from shopping areas anyway.

If, as you interpret, meter readers are averaging a reading every 5 mins or so, and bearing in mind they have to travel to & from the actual location, this would imply meter readers do go from house to house as they did in days gone by.

Yes, that's my interpretation. As meter installations are so much less frequent and therefore more sparsely distributed, I assume they take a larger share of the vehicle miles and that the meter readers generallly walk between readings and use the van to go between different areas.

(As you say, not all 1000 employees are meter readers, some are office based personel which would imply it's even less than 5 mins)

Has anyone seen this recently? I've certainly seen this with, for example, water board meter readers, but can't say I've noticed this with gas/electricity meter readers - in fact it would be true to say I have seen on many occassions where they just go to a single address before jumping in their van and going elsewhere.

Perhaps it's just my experiences, or unusual about the town I live in?

I don't know why they do that with you, but it certainly would be a sweeping assumption to apply that across the whole industry on the basis of one. I haven't paid enough attention to how meter readers operate in my area, but that's just because it doesn't seem important to me.

Let's look at the problem another way. There are roughly 25 million households in the UK. Around 80% of them are supplied with mains gas in addition to electricity. They are supposed to read each meter at least once every year. That makes a minimum of 45 million meter readings. If each meter reader only read one meter every 45 minutes, 40 hours a week, 50 weeks a year, that means about 270 meter readings a year. 45 million divided by 270 is 166,666 meter readers in the UK. Or put another way: 1 in every 150 homes has to have a meter reader living there to reach the minimum number of meter readings. That just cannot be correct.

Switching suppliers and incentives for new customers may well be costing us dear for all I know. It just doesn't strike me that meter reading is costing us very much.

deanos

Premier wrote: »

Has anyone seen this recently? I've certainly seen this with, for example, water board meter readers, but can't say I've noticed this with gas/electricity meter readers

Water meter reader's do go from house to house i can say that for certain

Its not a minimum wage job far from it, and it is alot more complicated than just inputting readings.

As for gas & electric meter reader's i often bump into those and they are always on foot walking down a street doing houses , certainly not driving from one to the next, they do alot more than 40 hours as alot work on bonuses, some even have to provide there own vehicle

CLAPTON

my meter readers always read both the gas and electric meters

Premier_2

Sorry, it looks like I've worded a few things ambiguously here.

I agree that water meter readers do go from house to house too.

I'm not sure what other companies pay, but I recently saw an advert by Accuread for meter readers in our local rag. I'm sure pay was advertised at £6 something per hour.
I can't find it now, but here's a site suggesting rates
http://www.careers-scotland.org.uk/CareerInformation/Occupations/Engineering/ElectricalandElectronicEngineering/MeterReader.asp
Between £220 and £370 a week (upto £410 a week max for high earners) based on 39 hour week - i.e. £5.64 per hour and £9.48 per hour (£10.51 max)

National Minimum Wage for 22yr old and older is £5.52 rising to £5.73 on 01/10/2008


Edit: Here's an actual vacancy with eon
http://www.eon-uk.com/careers/252.aspx?nPostingID=2736&nPostingTargetID=4434&option=52&sort=DESC&respnr=1&ID=PS9FK026203F3VBQB8M6G791X&LOV12=6147&Resultsperpage=10&lg=UK&mask=eonext
Pay: £15.5k on target earnings
That equates to about £7.50 per hour if you hit targets set. (based on assumed 40 hour week - although previous poster says they do a lot more than this usually. I guess it depends how keen someone is to hit targets)
I wonder what the basic wage is?
Note: they expect you to provide your own vehicle for this position - the accuread position provided the vehicle for business use.

deanos

Pretty low pay for EON and you have to hit targets and use your own vehicle