Npower has been fined £2.4 million by Ofgem after failing to install advanced electricity meters at 4,000 meter points by the April 2014 deadline.
The regulator says the failure has resulted in some business energy customers missing out on the opportunity to receive better information about their energy consumption and control costs.
The fine also relates to the company replacing almost 200 electricity meters at relevant business premises with non-advanced meters between October 2009 and November 2015 – a breach of its licence conditions.
Ofgem sought a financial penalty of £3.7 million from Npower for the breach but the supplier contested Ofgem’s case and the decision was referred to the Enforcement Decision Panel (EDP).
The EDP was set up in 2014 to take important decisions in contested cases on behalf of the Gas and Electricity Markets Authority. It is made up of Ofgem employees that are independent of the Ofgem case team that investigates compliance with supply licence requirements.
In this case the panel determined the fine of £2.4 million will be paid to HM Treasury.
Ofgem last fined a supplier following a contested case in 2013 when SSE was forced to pay a record £10.5 million for mis-selling, after it discovered sales representatives had made “misleading and unsubstantiated statements” to potential customers about savings they could make.
In response to today’s ruling, a spokesperson for Npower, said: “Ofgem’s announcement today draws a line under an investigation which relates to events several years ago.
“Npower remains committed to supporting our customers to benefit from AMR and smart metering.”
In 2009 the then-government launched its scheme to rollout advanced meters to businesses as part of a national project to modernise the energy sector.
Npower had five years to “take all reasonable steps” to install advanced meters for its larger non-domestic customers.
The big six company had approximately 22,400 meter points at which it needed to install advanced meters by April 2014. Npower installed advanced meters at 15,200 of these meter points.
Ofgem found the supplier did not take all reasonable steps to install the meters, and therefore failed to meet its legal requirements for the rollout as set out in its licence conditions.
The regulator found that Npower:
- Left it too late in the rollout period for its efforts to install advanced meters to be effective;
- Did not make sufficient efforts to engage with customers to resolve installation difficulties in many cases;
- Did not make sufficient efforts to ensure the meters were able to send meter readings
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.
“Suppliers must learn their lesson to make sure mistakes like this are not repeated in the rollout of smart meters.”