E.On to pay £7m for smart meter failure

Ofgem has ordered "Big Six" energy supplier E.On to pay £7m for failing to supply its business customers with energy-efficient smart meters.

The energy regulator found E.On supplied smart meters to fewer than 65% of eligible electricity business customers by an April 2014 deadline.

E.On has agreed to pay £7m to the Carbon Trust for missing the deadline.

It now has a year to meet a new interim target and could pay a further £7m if it fails to do so.

Ofgem warned that if E.On failed to meet its new deadline, it would consider imposing a sales ban preventing E.On from taking on new business customers until it was able to supply them through a smart meter.

Ofgem is also investigating the rollout performance of British Gas and Npower.

The government gave energy suppliers five years from 2009 to supply smart meters - which monitor electricity and gas consumption more efficiently - to their business customers.

Under the scheme, E.On was required to supply its 20,000 business electricity customers with smart meters, But it supplied just under 65%, or 13,000, of those customers, with the new meters.

The government also expects energy suppliers to fit more than 26 million households across England, Wales and Scotland with smart meters by 2020.

Anthony Pygram, Ofgem's senior enforcement partner, 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."

A spokesman for E.On said: "Installing advanced meters to tens of thousands of business customers across the country was always going to be a significant challenge and one that threw up a variety of hurdles for suppliers to overcome.

"That said, we cannot, and will not, overlook the fact that we did not do enough in time to meet the deadline and in that regard failed to provide the efficient service our business customers demand and deserve."