Ofgem has warned Utilita that it could face a ban on taking on new customers, if it fails to install second-generation smart meters in line with its licence obligations.
The regulator said the supplier continued to install first-generation Smart Metering Equipment Technical Specification (SMETS1) meters in large numbers, despite the introduction of the ‘New and Replacement Obligation’ (NRO).
The NRO mandates suppliers to take all reasonable steps to install a SMETS2 meter at any new or replacement installation of a meter from 30th June 2019.
SMETS2 are the latest generation of smart meters – SMETS1 meters may lose their smart functionality when customers switch supplier and this could potentially result in inaccurate bills and confusion over the tariff, according to Ofgem.
If the supplier does not meet these SMETS2 smart meter installation targets, it will be banned from taking on new customers or upgrading current customers to dual fuel until it has met each installation target, Ofgem said.
Charles Hargreaves, Ofgem’s Deputy Director of Conduct and Enforcement, said: “Smart meters are vital for upgrading Great Britain’s energy infrastructure, enabling customers to be better informed and engaged in managing their energy consumption by providing them with real time information on their energy use.
“Smart meters also help enable the transition to a more flexible energy market and the move to a low carbon economy.
“Ensuring all energy suppliers take all reasonable steps to install SMETS2 meters for new and replacement meters is critical to the success of the smart meter rollout as it enables smart meters to operate reliably for all consumers regardless of their energy supplier.”
Bill Bullen, Chief Executive Officer of Utilita, said: “We have been left shocked and disappointed at the tone of Ofgem’s announcement. To say we have been ‘failing to act on smart meters’ is grossly unfair – in fact, we have led the way in prepay smart energy, installing the first smart meter in Britain in 2005, many years before the national rollout began and before any government obligation was introduced.
“It has been suggested SMETS2 meters are more advanced than SMETS1 meters – this is simply not true. For PAYG customers, SMETS1 meters are proven, secure, robust and reliable and provide excellent functionality that has enabled our customers to control their energy and use approximately 20% less than the average household and to stay on supply during times of financial struggles.
“Serving PAYG energy households effectively is our main objective, and SMETS2 meters do not enable us to do this in the same way that SMETS 1 meters do.”