EDF Energy, one of the UK’s Big Six energy suppliers, has been fined £350,000 by the regulator for missing its smart meter installation targets for 2017.
The fine will be paid into Ofgem’s consumer redress fund, managed by the Energy Savings Trust, to help vulnerable customers.
A government-issued mandate, enforced by regulator Ofgem, requires large energy suppliers (i.e. with over 250,000 customers) to install smart meters in all homes and small business premises by 2020, with the companies required to set their own annual targets for inspection. EDF was three weeks overdue, finally reaching its target figure for 2017 in late January 2018
According to industry figures, as of March 2018, there are 11 million smart meters in UK households. However, by 2020, the estimate is that there will be 50 million households and businesses in need of a smart meter, requiring a serious acceleration on the part of energy companies if they are to avoid hefty fines.
According to the regulations, if a firm fails to install smart meters in a reasonable number of properties by 2020, the fine could be up to £7 billion. To counter this, and to offset the cost of any potential fine, three of the largest firms (British Gas, EDF, and First Utility) have started charging customers for refusing smart meters – up to £111, which is held back from savings rather than being a direct charge.
Jim Poole, EDF Energy’s director of customer operations, said: “EDF Energy is working hard to meet its smart meter programme objectives, delivering the benefits of smart meters to our customers, and we are disappointed we were three weeks late in reaching our 2017 target.”
He continued, stressing that the delay in installations wouldn’t be repeated: “During 2017 we doubled our smart meter installation rates and employed more people to install smart meters. We recovered the shortfall quickly in 2018 and are on target for this year. We have worked with Ofgem to resolve this matter quickly, and have agreed to make a payment to a fund for vulnerable customers.”
A serious controversy over the tactics used by energy companies in attempting to convince customers to let them install meters has been brewing. A campaign group called Stop The Smart Meter Bullying has been arguing that firms are deliberately misleading or intimidating customers into allowing them to install a meter, in order to meet their own targets. Some have claimed that the installation was a legal requirement, or even, as explained above, withheld better deals, both of which being illegal practices.
Martyn James, from Resolver, the complaints website, said: “Smart meters once promised to be the great hope for householders wanting to reduce their bills. But their introduction has been marred by bully-boy businesses pressuring people to take them out, technical troubles, and confusion about whether they’re worth having. Offering incentives to people who take out smart meters is fine – as long as it doesn’t create a two-tier system where older and more vulnerable people once again pay the price for not switching.”
