Business Energy: £7m fine for smart meter failure

The take-up of smart meters among business energy users has been criticised as too slow. One of the ‘Big Six’ business energy suppliers must pay £7 million, a sign that changes might soon be coming.

Ofgem, the UK’s the independent energy regulator, has asked E.ON to pay £7 million for failing to supply business energy customers with smart meters. E.ON delivered advanced meters to less than 65% of its relevant electricity business customers by April 2014 deadline, as Ofgem outlined in an online release.

The £7 million it must now pay will go to the Carbon Trust. If a new deadline is not met within the next year, E.ON will have to pay another £7 million and Ofgem may consider a sales ban on taking on new business customers until E.ON can supply them with an advanced meter.

Smart meters for business energy

Despite some good resources about smart meters (including our own guide), takeup of smart meters has been somewhat disappointing. The potential to lower business energy usage though much better insights offers a win-win; cutting energy use in a time of tight supplies and saving SMEs money.

The new E.ON case comes at a good time; as Ofgem says, it “sends a strong signal to all suppliers about the importance of complying with deadlines”.

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.

But more than 7,000 customers did not get a meter on time and E.ON has not been able to “demonstrate that it took all reasonable steps” to ensure its customers were given smart meters. Ofgem claims that E.ON “gained financially by avoiding the costs of installing and operating the new meters”.

Switch business energy

Business energy suppliers may seem reticent to roll out advanced meters. But they are still required to provide smart meters to business energy customers.

Many business energy suppliers have been doing well with the smart meter rollout, and even E.ON has made some further progress since April 2014, according to Ofgem.

For UK small to medium sized enterprises, frustration at not being offered a smart mater may turn to (cautious) optimism: E.ON’s £7 million loss, followed by a possible further £7 million, should act as a warning to others.

As 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.

Best business energy

Smart meters have the potential to transform the business energy market, as Pygram remarked. But time-poor SME owner-managers often have many other things to worry about.

For free and fast advice on smart meter installation, SwitchMyBusiness.com offers comprehensive business energy comparisons that can include information about smart meters (along with a range of other information). It only takes 20 minutes so give us a call on 0330 0100 251 (or request a call back using our form) now.

Our dedicated pages have lots more information about business gas and business electricity.

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