Firm failed to hit targets
E.ON facing £14m penalty for meter failures
Energy firm E.ON has been hit with a penalty of up to £14 million for failing to hit targets on installing meters for business customers.
Ofgem, the regulator, said the company had “failed in its duty to supply relevant business customers through advanced electricity meters by the April 2014 deadline”.
E.ON will pay £7m immediately to the Carbon Trust and has agreed to pay a further £7m in redress if it fails to meet a new interim target which could also trigger a sales ban.
The roll-out is part of a national project to modernise the energy sector and provide better service by introducing next-generation, smarter meters to help customers control their usage and bills.
The government’s advanced meter roll-out scheme for businesses began in 2009. Under this, E.ON had five years to fit around 20,000 customers with, and supply electricity through advanced meters.
It only completed 64.4% of its roll-out, meaning over 7,000 customers did not get a meter on time. In a rugling today Ofgem said E.ON was “unable to demonstrate that it took all reasonable steps to fulfil its required meter rollout”.
It added: “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 costs of installing and operating the new meters.”
Suppliers who failed to deliver on time are nonetheless still required to roll out advanced meters. Ofgem acknowledges that since April 2014, E.ON has made some further progress.
However, the supplier has accepted it needs to do more and has agreed that unless it meets an interim target within the next year, it will pay a further £7m in redress.
“If E.ON is still not compliant with its obligations after a further six months, we are ready to consider imposing a sales ban preventing them from taking on new business customers until it is able to supply them through an advanced meter,” said the regulator.
Anthony Pygram, Ofgem senior partner with responsibility for enforcement said: “It’s unacceptable that E.ON 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 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.”