Voluntary settlement to paid by OVO Energy, which acquired SSE's energy supplier business in January this year
SSE Energy Services has agreed to pay £1.2m for missing customer smart meter installation targets last year, energy regulator Ofgem announced today.
However, OVO Energy is to foot the bill for the voluntary settlement, having acquired SSE's energy supplier business in January 2020.
Under the government's smart metering implementation programme, large suppliers - those with more than 250,000 customers - have been required to take all reasonable steps to rollout smart meters to all homes and small businesses by mid-2021. To measure progress towards the goal, suppliers set annual targets for the proportion of their customers that would have smart meters by the end of each year, which Ofgem uses to monitor their performance.
Following an investigation by Ofgem, it said SSE Energy Services had made a voluntary agreement to pay £1.2m to the regulator's consumer redress fund, which avoids the regulator taking formal enforcement action against the firm.
SSE Energy Services managing director Tony Keeling emphasised that the payment relates to missed targets from 2019, predating OVO Energy's ownership of the firm.
"Since OVO's acquisition of SSE Energy Services, we have significantly improved our smart meter rollout programme, to ensure that we can install smart meters in more homes across the UK - a crucial part of our Plan Zero strategy and the transition to net zero," Keeling said. "OVO Energy has consistently met and exceeded all of its smart meter targets, with over half of its customers currently benefiting from the technology."
Advocates of smart meters see them as crucial for boosting public awareness of energy use and automating billing processes. The technology is credited with helping to drive down emissions and bills while enabling a new wave of smart home and grid technologies.
The government estimates the nationwide smart meter rollout could knock up to £16bn a year off the costs of reaching the UK's 2050 net zero emissions target, in addition to collectively saving businesses which install smart meters around £1.5bn a year on their bills.
However, while the government had aimed to offer every UK home and business a device by 2020, industry insiders had long been warning the target was likely to be missed even before Covid-19 led to most installations being halted and the rollout rate slowing significantly in this year.
In view of the disruption wrought by the Covid-19 crisis, the government In June agreed to grant energy suppliers an extra six months to meet their installation targets for 2020, in order to help make up for the reduced contact engineers have had with customers since March.
Then, from July next year, a new rollout regime is being introduced, with the government expected to shortly consult on a new set of "ambitious" annual targets running to 2025, it announced in June.