Utilita faces new customer ban after installing smart meters that don't always work when you switch

The energy regulator is now deciding whether to force the firm to install 15,000 new smart meters – known as second generation models – by 31 July 2021. These can be installed in new or existing customers' homes, but if Utilita misses this deadline it can be banned from taking on new customers.

These proposals will now be consulted on until 4 January 2021. Under Ofgem rules that came into force in June 2019, energy suppliers must "take all reasonable steps" to install second generation models, which carry on working when customers switch, when they put in new or replacement smart meters – see below for more on this.

But Utilita has hit out at Ofgem, calling its warning "grossly unfair" and insisting it has installed first generation smart meters with its customers' "best interests at heart".

See our Smart Meters guide for more on how they work, and and use our Cheap Energy Club to see if you could switch and save on your energy bills.

What are smart meters?

Smart meters are next-generation gas and electricity meters which send automatic meter readings straight to your supplier, theoretically ending estimated bills. They are free to get, and all homes in the UK are supposed to be offered one by energy firms – but they are not mandatory.

There are two types of meter:

• First generation meters (SMETS 1). Many people who already have a smart meter will have the first generation, known as SMETS 1 (Smart Metering Equipment Technical Specifications). These communicate with your supplier, but if you switch it's unlikely the new supplier will be able to pick up that communication. This can mean households have to go back to taking manual meter readings, which could leave them with inaccurate bills. The meters themselves may also show confusing old tariff information.

• Second generation meters (SMETS 2). If you've had a smart meters installed over the last 18 months or so, or you're set to get one, it's more likely to be a second-generation SMETS 2 meter. These use their own communications systems via a central data network to which all suppliers have access. So when you switch, your new supplier should be able to see your usage and meter readings, and your in-home display should show you your usage with the new supplier's costs.

What does Utilita say?

Utilita's chief executive Bill Bullen said he doesn't believe second generation meters are as effective for prepayment meter customers, which is the firm's main customer base. MoneySavingExpert.com has asked Utilita for more information on this and we'll update this story when we hear back. 

Mr Bullen said: "We have been left shocked and disappointed at the tone of Ofgem's announcement. 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.

"For pay-as-you-go customers, SMETS 1 meters are proven, secure, robust and reliable, and provide excellent functionality. Serving pay-as-you-go energy households effectively is our main objective, and SMETS 2 meters do not enable us to do this in the same way that SMETS 1 meters do."