E.ON – one of the Big Six energy suppliers – has been fined £7 million by Ofgem for ‘unacceptable’ failings in the installing of smart meters for its business customers.
The energy giant has also been warned it faces a further £7 million fine and a sales ban if it fails to meet new interim targets. The ban would prevent E.ON from taking on new business customers until it was able to supply them through a smart meter.
Anthony Pygram, Ofgem’s enforcement chief, said: “It is unacceptable that E.ON has failed to roll out advanced meters to these business customers on time.
“Customers have lost out on receiving better information about their energy consumption and the opportunity to control costs. Unless E.ON improves its poor record it will have to pay out even more and may face a sales ban.
“The roll-out of advanced meters has the potential to transform the energy market. We expect all suppliers to learn the lessons from this ahead of the domestic smart meter roll-out, in particular the need to start the process in good time and ensure senior managers are committed to delivering on time.
The scheme called for energy suppliers across the UK to take all reasonable steps to install advanced electricity meters for 155,000 business customers by April 2014. However, E.ON had only installed 12,000 of its 20,000 share by the deadline.
The Ofgem spokesman said: “The supplier failed to plan and monitor its roll-out and its senior management didn’t do enough to ensure it complied.
“E.ON has also gained financially by avoiding the cost of installing and operating the new meters.”
A significant challenge
A spokesman for the company said: “Installing advanced meters to tens of thousands of business customers across the country was always going to be a significant challenge and one that threw up a variety of hurdles for suppliers to overcome.
“That said, we cannot and will not overlook the fact that we did not do enough in time to meet the deadline and in that regard failed to provide the efficient service our business customers demand and deserve.”
The £7 million fine will fund a two year programme of energy saving support for small and medium businesses which will be delivered by The Carbon Trust.
Ofgem is also investigating the roll-out performance of another two of the Big Six suppliers – British Gas and Npower.
Next on the list is for the energy suppliers to fit 26 million smart meters for domestic customers before 2020.