Ofgem fines Npower £2.4m over failure to install advanced meters

Regulator Ofgem said the company failed to install advanced meters for electricity business customers at nearly 4000 meter points by the April 2014 deadline, while it also wrongly installed about 200 traditional meters.

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

The specific obligation was to install “advanced” meters; a particular type of smart meter which allows for one-way remote communication between customers’ premises and suppliers’ IT systems. The advanced meter obligation prohibits the supply of electricity to all larger non-domestic premises other than through an advanced meter unless the supplier has taken all reasonable steps to install such a meter.

Ofgem said Npower’s failings meant affected customers missed out on the opportunity to receive better information about their energy consumption and control costs. The regulator also sent out a warning to energy firms not to make similar mistakes in the roll-out of smart meters to households and small companies.

Rob Salter-Church, Ofgem interim executive director for consumers and markets, said: “Npower is paying the price for failing to meet its obligations and letting down its business customers.

“The Government set a clear deadline for suppliers to ensure no business customers unnecessarily missed out on the benefits of advanced meters, including the opportunity to save money on their bills. The fine reflects that there were systemic failings by Npower which led to the serious failure of not meeting the deadline.”

Npower had five years to install advanced meters for large business customers, but had only completed this for 15,200 out of 22,400 points by the deadline. The regulator found that Npower left it too late to begin the roll-out, while it also failed to contact business customers to resolve installation difficulties in many cases and did not ensure the meters were able to send readings.

An original fine of £3.7 million was reduced after Npower contested the case and the decision was referred to the Enforcement Decision Panel. The fine will be paid to the Treasury.

Consumers will also receive smart meters in the next few years following a botched initial rollout where the first generation of devices ceased to work when customers switched their energy supplier.

In February a Labour MP said that the rollout of smart meters in the UK will become “a very expensive IT white elephant” unless costs for the scheme are brought under control.