‘Big Six’ utility E.ON has been fined £7 million by energy regulator Ofgem over failures within its smart meter roll-out to business customers.
Ofgem revealed this morning that Germany-headquartered E.ON had delivered advanced energy metering systems to less than 65% of its business customers by April 2014, five years after a government-backed roll-out began.
The utility was supposed to have delivered the meters to around 20,000 customers by the April 2014 deadline, but Ofgem discovered that less than two-thirds had received a meter in time meaning that around 7,000 business customers had missed out.
An Ofgem investigation also found that E.ON had failed to take “all reasonable steps” to fulfil its required roll-out, and that it had failed to plan and monitor the scheme to ensure that it complied.
Ofgem ruled E.ON had gained financially by avoiding costs associated with installing and operating the new meters, and ordered it to pay a £7 million redress payment. E.ON has since agreed to an undisclosed interim target to be met within the next year, and failure to do so will result in a further £7 million redress payment.
E.ON has also been threatened with a sales ban – preventing the utility from taking on new business customers – if the utility is still not compliant within 18 months.
Anthony Pygram, senior partner with responsibility for enforcement at Ofgem, said it was “unacceptable” for E.ON to have failed in its business customer smart meter roll-out plan.
“Customers have lost out on receiving better information about their energy consumption and the opportunity to control costs. Unless E.ON improves their poor record, they 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,” he said.
The £7 million fine has been granted to the Carbon Trust, which will use it to help fund energy saving audits, deliver energy savings advice and pay for energy efficiency measures in small and medium-sized businesses in the UK.
