Last week Ofgem announced that Utilita Energy Limited could be banned from taking on new customers as the regulator consultd on issuing the company 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.

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.

According to Ofgem, 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, Ofgem said 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 it has provided to Ofgem, the regulator added.

It warned Utilita that if it 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 said it could take further enforcement action.

In response to the announcement, Bill Bullen, CEO of Utilita, said: “We have been left shocked and disappointed at the tone of Ofgem’s announcement. To say we have been ‘failing to act on smart meters’ is grossly unfair – in fact, we have led the way in prepay smart energy, installing the first smart meter in Britain in 2005, many years before the national rollout began and before any government obligation was introduced. Since 2005, we have installed effective smart meters in 90% of our customers’ homes, giving many vulnerable and low-income households the best energy service they have ever experienced.

“It has been suggested SMETS2 meters are more advanced than SMETS1 meters – this is simply not true. For PAYG customers, SMETS1 meters are proven, secure, robust and reliable and provide excellent functionality that has enabled our customers to control their energy and use approximately 20% less than the average household, and to stay on supply during times of financial struggles. Serving PAYG energy households effectively is our main objective, and SMETS2 meters do not enable us to do this in the same way that SMETS 1 meters do.”