Drax Power and InterGen have been fined a total of £39 million for failing to meet energy measures to households in low-income areas.
Ofgem, the government regulator for the electricity and downstream natural gas markets, fined Drax £28 million and Intergen £11 million.
The two energy companies failed to meet targets to insulate homes under two energy efficiency schemes that ended in 2012.
Scottish Power, GDF/Suez and SSE are also likely to be fined for the same failing within a few weeks.
The penalties were imposed for not meeting targets under the Community Energy Saving Program (CESP), which was part of the Home Energy Saving Program.
The CESP’s aim was to help low-income households with wall/loft insulation and new boilers.
Regarding Drax, Ofgem said the company was aware of the serious risk of non-compliance with CESP 18 months before the scheme ended. “After the deadline passed, Drax made no attempt to mitigate the carbon saving shortfall. This was a significant factor in Ofgem’s decision (to impose the penalty),” Ofgem wrote in its website.
The energy companies benefited financially by not helping poorer households, said Ms. Harrison. The fine takes away that unfair gain.
Sarah Harrison, senior partner in charge of enforcement at Ofgem said:
“Drax missed its target by a clear margin, disadvantaging several thousand households in some of the most deprived areas in Britain. Not only are these consumers missing out on energy efficiency measures that would help keep their homes warm, they also face higher energy bills as a result. Today’s agreement to pay £28 million reflects the seriousness of the consequences of these failings for consumers.”
Ofgem says that InterGen only delivered 61.2% of its obligated energy saving measures to approximately 2,200 households by May 2013, which was about 1,500 households short of its target.
The Government regulator found that InterGen gained financially by failing to deliver its obligation.
The £11 million fine reflects the fact that InterGen has not met its target, consumers have lost out considerably, and makes sure the company does not gain financially from non-adherence.
Ms. Harrison said regarding InterGen:
“Ofgem takes compliance with obligations, both of governmental schemes and regulatory rules, seriously. InterGen missed its target by a clear margin, disadvantaging many low-income households. The £11 million payment reflects the seriousness of these failings and means InterGen has not gained through its non-compliance.”
Video – Ofgem fines Drax Power and InterGen