Court: ESO reasonably rejected the application of a tenderer in the smart meter procurement procedure

The Vilnius Regional Court ruled that Energijos Skirstymo Operatorius (ESO) had reasonably rejected the tender of one of suppliers in the procurement procedure of smart meters, which had been submitted belatedly. Having considered the actual circumstances of the Supplier’s application, the court decided to dismiss the claim, to terminate the case and to cancel the interim measures - suspension of the procurement procedure.

In the procurement of smart metering infrastructure announced by ESO, the Supplier disputed ESO’s decision to reject its application, even though it had submitted the application after the deadline and by means other than via the Central Procurement Information System (CPP IS). The smart metering procurement procedure has been suspended since August 2019 due to judicial proceedings instituted by the Supplier. Once the decision is finalized, ESO will resume the procurement procedure.

On 6 June of this year, ESO announced the procurement of smart metering infrastructure. With this procurement, ESO plans to purchase about 1.2 million smart meters and all the necessary infrastructure for the management of these meters, collection and processing of data. 

About the smart metering project

Smart metering planned by ESO will bring long-term benefits to Lithuanian consumers, the electricity distribution network and the entire Lithuanian economy. It is noteworthy that a wide range of socio-economic benefits to consumers, the distribution network and market empowerment was discussed and calculated when coordinating project investments with VERT. They can be divided into the following three main categories:

Long-term benefits to the population. As many as 450 000 European consumers took part in 100 pilot projects in various countries. According to a survey prepared by the European Smart Metering Industry Group (ESMIG), their savings ranged from 5% to 8.7%, depending on the level of consumer engagement in the smart metering project. During the pilot project carried out by ESO in 2017, customers used up to 6% less electricity on average. 

Benefits to the Lithuanian economy. The deployment of smart meters and capturing of consumption every 15 minutes will enable competition, i.e. allowing independent suppliers to better compete for customers in terms of services, their quality, price or other individual solutions. A similar transformation occurred in the telecommunications sector twenty years ago. The deployment of smart meters is expected to help achieve market competition and dynamics that will bring the greatest benefit of choice to every Lithuanian consumer. 

More efficient distribution network management. The deployment of smart meters will allow ESO to remotely identify where and which consumption is unlawful, to monitor the quality of the electricity network and to promptly take action to stop such activities. Also, investments in the network will be more targeted, optimizing meter maintenance costs and costs of taking meter readings. Smart meters have already been installed and successfully operating in nearly all European countries.