Utilita could face ban on new customers if it fails to act on smart meters

  • Utilita continues to install first generation smart meters and has failed to install second generation smart meters when it should have done so
  • Those who wish to switch with first generation smart meters may lose functionality, undermining the smart meter rollout
  • The supplier will have to install 15,000 second generation meters by 31  July 2021 or be banned from taking on new customers

Energy regulator Ofgem is consulting on issuing Utilita Energy Limited with a final order compelling the supplier to install SMETS2 (Smart Metering Equipment Technical Specification) meters for new and replacement meters in line with its licence obligations, or be banned from taking on new customers.

SMETS2 are the latest generation of smart meters. The first generation (SMETS1) meters may lose their smart functionality when customers switch supplier. This could result in inaccurate bills, as manual reads could be needed, and risks confusing customers as their In-Home Display could show old tariff information.

Utilita has continued to install SMETS1 meters at volume despite the introduction of the ‘New and Replacement Obligation’ (NRO), where suppliers must take all reasonable steps to install a SMETS2 meter at any new or replacement installation of a meter, from 30 June 2019.

By continuing to install SMETS1 meters in large numbers, Utilita is also increasing the number of SMETS1 meters that will need to be enrolled into the Data Communications Company (DCC). The DCC is responsible for the national infrastructure that enables communications between smart meters, energy suppliers and network companies.

If the final order is made, Utilita will have to install 250 SMETS2 meters by 30 April 2021 and install 15,000 SMETS2 meters by 31 July 2021, in line with the plan that they have provided to Ofgem.

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If Utilita fails to meet each SMETS2 smart meter installation target by the deadlines, it will be banned from taking on new customers or upgrading current customers to dual fuel until it has met each installation target.

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.”

If Utilita fails to install SMETS2 smart meters when it should do so, Ofgem could take further enforcement action.

Ofgem is closely monitoring all suppliers’ approaches to the rollout of smart meters and will use its discretion to hold suppliers to account if they do not meet their obligations.

Notes to editors

  • The final order will be consulted on until 4 January 2021, and then a decision will be made as to whether it is issued (taking into account any representations or developments in the meantime).
  • Utilita, in Ofgem’s view, is contravening standard licence condition (“SLC”) 39.7 and SLC 33.7 of the electricity and gas supply licences.
  • Smart meters help households control their energy use and save money. They ensure that households will no longer have to take meter readings or receive bills based on estimated readings.
  • In June 2020, in light of Covid-19, the government announced that the current rollout obligation (which is a separate and distinct obligation to SLC 39.7 and SLC 33.7) will be extended until 30 June 2021 and that a new obligation to roll out smart meters will commence on 1 July 2021, which will see the rollout continue until mid-2025.
  • For more on the smart meter programme, see our website.
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