Ofgem opens investigation into British Gas, E.ON and Npower over advanced meter roll-out performance

Press release
Publication date
Industry sector
Supply and Retail Market
  • British Gas, E.ON and npower were the three suppliers with the lowest completion rates for installing advanced electricity meters for business customers
  • Ofgem tells all suppliers to learn lessons ahead of domestic smart meter roll-out
  • Ofgem to investigate whether all reasonable steps were taken to install advanced electricity meters

Ofgem has today launched investigations into British Gas, E.ON and npower over their advanced electricity meter roll-out performance.

Under the Government’s advanced meter roll-out scheme, which began in 2009, suppliers had to take all reasonable steps to fit 155,000 business customers with, and supply electricity through, advanced electricity meters by April 2014. Based on our assessments, the roll-out was only 75% complete in electricity, compared to 86% complete in gas. British Gas, E.ON and npower had the lowest completion rates in electricity, accounting for over half of the 40,000 advanced electricity meters still waiting to be installed.

Irrespective of the deadline having passed, all suppliers must continue to press ahead with the roll-out of advanced meters. Today’s investigations are opened into three companies with the lowest completion rates, however there were a number of other suppliers who also did not roll out advanced meters to all its eligible customers. Ofgem will keep the need for action in respect to these suppliers under review.

Advanced meters offer customers better and timelier information about their energy consumption. This enhanced information is an opportunity to control costs, with the government estimating that overall businesses will save around £40m annually.

Rachel Fletcher, senior partner for Ofgem’s markets division, said: “We are disappointed in the overall performance of the majority of suppliers concerning the roll-out of advanced meters to business customers. These new meters offer real benefits to customers including saving money through reduced energy consumption and ending estimated billing.”

“Regulatory and government programmes are not optional and failure to meet these in a timely way causes consumer harm. All suppliers can and must learn the lessons from the roll-out of meters for business customers and apply them to the domestic smart meter roll-out.”

Ofgem monitored suppliers’ progress throughout the roll-out and repeatedly reinforced the need to deliver on time. Our investigation will look at whether British Gas, E.ON and npower took all reasonable steps to fulfil their obligation to fit advanced meters.

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Notes to editors

Investigations

Link to Ofgem investigations

Link to previous letters on advanced meter roll-out

The investigations will examine whether the three suppliers complied with their obligation to take all reasonable steps to install advanced meters to non-domestic consumers. The fact that Ofgem has launched investigations should not in any way be taken as implying that the companies involved have breached licence conditions or otherwise broken the law. As part of the investigation process Ofgem will examine any evidence of non-compliance and consider whether there are grounds for exercising enforcement powers. Further information on the investigation process and the potential outcomes can be found in Ofgem’s enforcement guidelines.

Advanced meter rollout

In April 2009, the Government introduced a new licence condition requiring suppliers to roll-out advanced gas and electricity meters to their larger non-domestic customers by 6 April 2014.

The advanced meter obligation requires that all larger non-domestic premises be supplied by advanced meters unless the supplier was unable to complete installation, despite taking all reasonable steps to do so. Ofgem considers “all reasonable steps‟ to be a high threshold for compliance.

Smart meter roll-out

A related Government scheme required suppliers to also roll-out smart meters to all domestic and smaller non-domestic customers by the end of 2020.

 

Smart meters bring a wide range of benefits. For example:

  • Smart meters give near real time information on energy use
  • You will be able to better manage your energy use, save money and reduce emissions
  • Smart meters will bring an end to estimated billing - you will only be billed for the energy you actually use, helping you budget better
  • Easier switching - smoother and faster to switch suppliers to get the best deals

Ofgem has recently published its strategy to monitor supplier progress with the roll-out of smart meters and encourage supplier compliance. Ofgem expects suppliers to learn the lessons from the advanced meter roll-out, in particular the need for suppliers to start their rollout in good time and to allow sufficient time to learn lessons as they execute the rollout.

For further press information contact:

Lisa O’Brien: 020 7901 7426

Dafydd Wyn: 020 3263 9943

Out of hours media contact number:  07766 511470