Ofgem said it would prepare enforcement action against 31 energy suppliers who failed to achieve rollout targets for electricity smart meters – a majority of the 49 suppliers required to provide smart meters – and 23 suppliers who failed to achieve their gas meter targets. The binding annual rollout targets took effect at the start of 2022 and run for four years.
The regulator said it had stated “on numerous occasions”, that suppliers have had significant time to plan smart meter delivery and put the appropriate processes in place to meet their targets. It added, “Some suppliers have succeeded in meeting or exceeding their 2022 targets, which demonstrates that this is achievable” and warned of increasingly severe penalties if suppliers do not catch up with targets during the next three years.
Noting that the number of installers employed by large suppliers fell from just under 6,800 in Q1 2021 to just over 6,000 in Q4 2022, the regulator said “suppliers are failing to do enough to secure adequate resource”. It also highlighted the wide variation in ‘abort rates’, which varied between 12% and 42%.
The regulator had particular concerns over the slow progress in replacing pre-payment meters with smart versions and replacing ‘tele-switch’ meters that allowed for tariffs such as Economy Seven (with cheaper overnight power). The signal that allows for telesiwtching will be turned off in 2024 land Ofgem said, “We are disappointed at the lack of progress in ensuring that these customers’ meters are exchanged for smart variants, especially given that this issue has been ongoing for some time within the industry” (see below). It added, “we would expect that suppliers are actively planning to ensure that these customers do not experience any detriment associated with the expiration of this service”.
Further reading
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