Power supplier Eon has agreed to pay a £7 million penalty after failing to hit a deadline for the roll-out of smart electricity meters.
Ofgem, the UK energy regulator, said the company faces a further bill of £7m if it fails to meet new installation targets.
The watchdog said that, under the UK government’s advanced meter roll-out scheme for businesses – which began in 2009 – Eon had five years to fit around 20,000 customers with smart meters.
But the company only completed 64.4 per cent of its roll-out, meaning that more than 7,000 customers did not get a meter on time, and was unable to show that it had taken “all reasonable steps” to fulfil its obligations.
“The supplier failed to plan and monitor its roll-out and its senior management didn’t do enough to ensure it complied,” Ofgem said today.
“Eon has also gained financially by avoiding the costs of installing and operating the new meters.”
Ofgem said that Eon has made “some further progress” since April 2014, but has accepted that it needs to do more. The German-owned company has agreed that, unless it meets an interim target within the next year, it will pay a further £7m in redress.
If Eon is still not compliant with its obligations after a further six months, Ofgem said it was prepared to consider imposing a sales ban preventing the firm from taking on new business customers until it is able to supply them through an advanced meter.
Anthony Pygram, Ofgem’s senior partner with responsibility for enforcement, said: “It’s unacceptable that Eon 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 Eon improves their poor record, they will have to pay out even more and may face a sales ban.”
He added: “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.”
Eon’s £7m redress payment will go to the Carbon Trust. Ofgem said this would fund the delivery of energy-saving audits and advice, and the installation of energy-efficiency measures to help small and medium-sized firms across Britain save energy.