Investigation into E.ON’s compliance with its obligations under the electricity supply licence (Standard Licence Condition 12)

Opened:
Oct 2014
Decision Proposed:
Nov 2015
Closed:
Dec 2015
Company:
E.ON
Regulation Area:
Sectoral Regulations

The Gas and Electricity Markets Authority ("the Authority") has confirmed its decision to impose a financial penalty on E.ON UK Plc and E.ON Energy Solutions Ltd (together referred to as "E.ON") following an investigation by Ofgem into its failure to comply with Standard Licence Condition 12 of the Electricity Supply Licence (SLC 12), in relation to advanced meters for non-domestic premises.

Under SLC 12.21 licensees must not, from 6 April 2014, supply electricity to any relevant premises other than through an advanced meter. SLC 12.22 states that this prohibition does not apply where the licensee is unable to install or arrange for the installation of any advanced meter at the relevant premises in question, despite taking all reasonable steps to do so.

The Authority found that, as at 6 April 2014, E.ON was supplying electricity to relevant premises, through 7,011 meter points, other than through an advanced meter and that it was not able to demonstrate that it had been unable to install, or arrange for the installation of, an advanced meter at those premises despite taking all reasonable steps to do so, in breach of SLC 12.21. The investigation focussed on the extent to which E.ON took, or failed to take, all reasonable steps.

The Authority considered it appropriate to impose a penalty for this contravention. The penalty took into account the fact that E.ON was unable to demonstrate that it had taken all reasonable steps to install or arrange for the installation of advanced meters at those 7,011 relevant meter points. The investigation invited E.ON to demonstrate that it had taken all reasonable steps to install advanced meters at all outstanding premises as at 6 April 2014. It was unable to do so. The Authority concluded that E.ON’s inability to demonstrate that it had, for example, effectively planned for and monitored its advanced meter roll-out, ownership within the business for compliance with the obligation, and sufficient management oversight meant that it did not take all reasonable steps to meet the obligation.

In the circumstances, the Authority decided to confirm the financial penalty of £2 on E.ON. This in addition to £7million (less £2) that E.ON agreed to pay in consumer redress to the Carbon Trust. These monies are to be used to help SMEs across Great Britain save energy via energy saving audits and advice, and installation of energy efficiency measures.

Furthermore, E.ON agreed to pay an additional £7 million if it did not achieve an installation target for its outstanding meter points by 2 November 2016.

Update 21 September 2016

E.ON achieved its installation target on 30 August 2016.