British Gas Business to pay £4.5 million for failing to meet advanced meter deadline

Publication date
7th December 2016
Information type
Policy area
  • British Gas Business failed to deliver advanced meters to some larger electricity business customers by April 2014 deadline.
  • These customers missed out on receiving better information about their energy consumption and the opportunity to control costs.
  • British Gas Business to pay £4.5 million redress, and agree to increased monitoring of its progress on installing the outstanding meters.

Ofgem requires British Gas Business to pay £4.5M to the Carbon Trust because it missed its deadline to supply some larger business customers through advanced electricity meters by April 2014.

The Government’s scheme to roll-out advanced meters to businesses began in 2009, as part of a national project to modernise the energy sector. British Gas Business had five years to fit around 43,000 customers with, and supply electricity through, advanced meters.

The supplier did not take all reasonable steps to fulfil the roll-out as it was legally required to do. Some customers were left without an advanced meter at the end of the roll out period.

Whilst British Gas Business took additional steps in 2013 to install the meters, these were too late to ensure that all eligible customers benefited from advanced meters by the April 2014 deadline. Further, it installed a small number of traditional meters instead of advanced meters.

Since April 2014 British Gas Business has made further progress in rolling out advanced meters to its business customers, in line with its legal obligation. The supplier understands this is a continuing obligation and has agreed to increased monitoring of its progress in installing the outstanding meters.

British Gas Business will pay £4.5 million to the Carbon Trust, to help businesses across Great Britain save energy though audits, advice, and energy efficiency measures.

Martin Crouch, Ofgem senior partner with responsibility for enforcement said:

“British Gas Business failed to meet its mandatory deadline to install advanced meters leaving some larger business customers unable to benefit.

“The supplier has since taken further action to prioritise the rollout, improving its performance.

“This penalty sends out a clear message to the industry that suppliers must meet regulatory deadlines. Smart meters are being rolled out to smaller non-domestic customers and suppliers must learn their lesson ahead of delivering this programme."

Notes to editor:

  1. Investigation into British Gas’ compliance with its obligations under the electricity supply licence (Standard Licence Condition 12)
  2. Medium and larger business advanced meter roll-out: In April 2009, the government introduced a new licence requirement requiring suppliers to roll out advanced gas and electricity meters to their medium-sized non-domestic customers by 6 April 2014. The specific obligation was to install “advanced” meters; a particular type of smart meter which allows for one-way communication between customers’ premises and suppliers’ IT systems. The advanced meter obligation required that all larger non-domestic premises be supplied by advanced meters unless the supplier was unable to complete installation, despite taking all reasonable steps to do so. Ofgem considers “all reasonable steps‟ to be a high threshold for compliance. Suppliers had a five-year period in which to prepare to supply gas and electricity through advanced meters. This obligation required around 28,000 gas meters and 155,000 electricity meters to be upgraded or replaced. Suppliers’ progress on the advanced meter roll-out to medium and larger businesses was monitored by Ofgem throughout the process and it repeatedly reinforced the need to deliver on time.
  3. As part of the government-mandated national infrastructure project to modernise the energy sector, suppliers are also required to roll out smart meters to all domestic and smaller non-domestic customers by the end of 2020. They bring a wide range of benefits. For example:
    • Giving near real time information on energy use.
    • Allowing consumers to better manage their energy use, save money and reduce emissions.
    • Bringing an end to estimated billing – consumers will only be billed for the energy they actually use, so they can budget better.
    • Easier switching – smoother and faster to switch suppliers to get the best deals.
  4. British Gas Business supplies around 400,000 business customers through more than 700,000 electricity and gas supply points. It installed around 42,000 meters at relevant premises during the roll-out period.

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