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10 Jan 2020

Nine energy companies risk closure for failing on smart meters

Find out whether your gas and electricity supplier is on the list, plus what this means for customers

Nine small energy firms could lose their licenses to supply customers with gas and electricity if they don't start using a crucial smart meter system.

All suppliers had to become users of the Data and Communications System (DCC), which allows smart meters to communicate, in November 2017, or as soon as they were fully-operational.

But these firms still aren't DCC users. Now they face final order notices from energy regulator Ofgem. If it issues them, the firms have to start using the system by the end of March 2020 or face being banned from taking on new customers.

The nine firms are: Ampower, Better Energy Supply, Daligas, Enstroga, Entice Energy, Green, Northumbria Energy, Symbio Energy and UK National Gas.

Update 6 March 2020: Daligas, Enstroga, Entice Energy, Northumbria Energy and Symbio Energy are now banned from taking on new customers until they become DCC users, Ofgem announced.

Keep reading to find out what this means for customers, or check our guide to smart meters: the essentials.

Smart meter
What this means for smart meter customers

All energy suppliers have to use the DCC system. At the moment, not all smart meters can connect to the DCC, but once they can this will mean that you can switch energy supplier and your smart meter will remain smart.

Many smart meter customers have seen their first-generation meter stop working when they switch supplier. This problem will be solved by the meters being connected to the DCC system, and many energy companies are in the process of making that happen.

But these nine companies (Ampower, Better Energy Supply, Daligas, Enstroga, Entice Energy, Green, Northumbria Energy, Symbio and UK National Gas) aren't using it. So customers that switch to them will see their smart meters stop working. If you switch to them, you will have to start taking your own meter readings again and send them to your energy company.

Find out more about smart meter problems and how to solve them.

I'm a customer: will my energy company be shut down?

Not necessarily. At this stage, Ofgem is consulting on whether or not to issue a final order notice to the nine firms breaking the rules. It will make the decision on 3 February 2020.

If it decides to go ahead, it would order the companies to start using the DCC system by the end of March. Until the firms did so, they would be banned from taking on any new customers.

If the suppliers were still breaking the rules at the end of March, Ofgem says it would take further action, which could include taking away their licenses to supply customers.

It isn't the first time that Ofgem has issued a final order to a company not using the DCC system. Avro Energy had a notice in March 2019, which was withdrawn when it stopped breaking the rules.

Should I get a smart meter?

Millions of homes now have smart meters fitted. If you don't have one yet, find out more about getting a smart meter installed.

Companies should now be installing second-generation meters for customers and these don't have the problems of earlier meters. If you're unsure, check with your energy supplier before it installs your new meter.

Meanwhile, a project is underway to link first-generation smart meters with the central DCC system so that they don't lose their smart functions when customers switch supplier. Eventually this will mean that you can switch to any supplier and keep your meter smart.

However, it's a slow process. Different brands of meter are being linked up at different times, and companies have a year to do it. There is still no solution for a small number of meters.

Ultimately, if your meter cannot be linked to the system, it will be replaced with a second-generation meter.