UK watchdog Ofgem has flexed its muscle with energy companies by fining providers a total of GBP4.6 million for failing to help low-income customers cut their utility bills.
Scottish Power, SSE and GDF Suez/IPM paid the penalties to charities for low-income families as part of a consumer redress package.
The trio are accused of not taking appropriate action to ensure they met targets under the government’s Community Energy Saving Programme (CESP).
The CESP scheme, created by the Department of Energy and Climate Control, was set up to lower carbon emissions through the delivery of energy saving measures, such as loft and cavity wall insulation free of charge, to households in low income areas.
Failure to deliver energy savings
The government asked energy suppliers to deliver against individually set targets by the end of December 2012.
Scottish Power, which received the heftiest fine of GBP2.4 million, met 70% of its target with the remaining 30% being made by four months later on April 30, 2013.
SSE, which last week paid out GBP1.75 million, delivered on 90.9%, which was the equivalent to 2,100 households missing out on energy efficiency measures, Ofgem said.
The Big Six energy supplier avoided paying a heavier fine by making up the CESP shortfall by May 2013, and delivering energy efficiency measures to 346 more homes than required.
Meanwhile, generator-owner GDP Suez/IPM received a GBP450,000 penalty for delivering only 38.6% of its reduced target on time.
The failure to meet its reduced target meant around 1,000 households missed out on energy efficiency measures during a cold winter.
Ofgem cracking down
The fines follow an investigation by Ofgem in May 2013 into six energy companies who failed to deliver on time their obligations under CESP.
Commenting on watchdog’s show of strength, Sarah Harrison, senior partner in charge of enforcement at Ofgem, said: “A key consideration for Ofgem during the investigation was the consumer impact.
“[The energy companies’] failure to deliver energy efficiency measures on time meant that households missed out on measures like insulation during the early months of 2013, where consumers experienced a particularly cold winter.
“Our action today is a clear signal that failure to deliver environmental obligations on time is not acceptable.”