The energy regulator found E.On supplied smart meters to fewer than 65% of eligible electricity business customers by an April 2014 deadline.
E.On has agreed to pay £7m to the Carbon Trust for missing the deadline.
It now has six months to meet a new interim target and could pay a further £7m if it fails to do so.
Ofgem
warned that if E.On failed to meet its new deadline, it would consider
imposing a sales ban preventing E.On from taking on new business
customers until it was able to supply them through a smart meter.
Ofgem is also investigating the rollout performance of British Gas and Npower.
The
government gave energy suppliers five years from 2009 to supply smart
meters - which monitor electricity and gas consumption more efficiently -
to their business customers.
Under the scheme, E.On was required
to supply its 20,000 business electricity customers with smart meters,
But it supplied just under 65%, or 13,000, of those customers, with the
new meters.
The
government also expects energy suppliers to fit more than 26 million
households across England, Wales and Scotland with smart meters by 2020.
Anthony
Pygram, Ofgem's senior enforcement partner, said: "It's unacceptable
that E.On failed to roll out advanced meters to these business customers
on time.
"Customers have lost out on receiving better information about their energy consumption and the opportunity to control costs.
"Unless E.On improves their poor record, they will have to pay out even more and may face a sales ban."
A
spokesman for E.On said: "Installing advanced meters to tens of
thousands of business customers across the country was always going to
be a significant challenge and one that threw up a variety of hurdles
for suppliers to overcome.
"That said, we cannot, and will not,
overlook the fact that we did not do enough in time to meet the deadline
and in that regard failed to provide the efficient service our business
customers demand and deserve."
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