Nine energy suppliers have been warned that if they do not join a common system allowing households to take full advantage of their smart meters they could lose their licences.
Ofgem (the government regulator for gas and electricity markets in Great Britain) has warned it could strip the licences as the small suppliers have all failed to become so-called 'Data Communications Company (DCC)' users after a November 2017 deadline.
The system allows smart meters to keep their smart functionality - such as sending meter readings to energy suppliers automatically - even when customers start buying their gas or electricity from a new company, reports the Mirror.
All suppliers have to sign up to the DCC system so customers can be sure their switch is as seamless as possible.
However, the roll-out of energy smart meters has been coated in controversy, contributing to delays.
Many customers with first generation Smets 1 meters lost function when they switched to a new supplier, meaning their meters became analogue and households were forced to submit meter readings manually.
Ofgem said: "This causes consumer detriment and could undermine consumer confidence in the smart meter programme and the switching process."
Energy experts say Smets 1 meters will regain their smart functions in a year or two when the DCC system is extended to include the first generation technology.
However, it may be too late to salvage a bruised reputation.
Ofgem said on Friday it is consulting on whether to issue final notices to the nine suppliers, compelling them to get in line with the DCC system.
If they do not comply, the regulator might start revoking licences.
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