12th December 2014
Energy companies will pay out over £4 million to benefit vulnerable customers after failing to meet their environmental obligations on time.
Energy regulator Ofgem will have to pay the money after it failed to meet its environmental obligations under the Community Energy Saving Programme (CESP), which requires energy companies to deliver energy saving measures to households in low income areas by the end of December 2012.
The scheme was designed to help lower carbon emissions and lower bills for households through installation of energy efficiency measures but SSE and Scottish Power have failed to meet their targets.
In recognition of its failures, Scottish Power has agreed to pay £2.4 million and SSE has agreed to pay £1.75 million to benefit vulnerable consumers through the Foundation Independent Living Trust, Energy Action Scotland and to the Citizens Advice Bureau.
Sarah Harrison, Ofgem senior partner in charge of enforcement, said: ‘A key consideration for Ofgem during the investigation was the consumer impact. SSE’s failure to deliver energy efficiency measures on time meant that over 2,000 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. By agreeing to make the payment to charities, Ofgem and SSE are ensuring that this money is targeting to energy customers who need it most.’
Of Scottish Power, she added: ‘Scottish Power clearly missed its target by the required deadline disadvantaging many households. Today’s redress package sends a clear message to the energy industry that late deliver of obligations is unacceptable.’
Citizens Advice welcomed the penalties; chief executive Gillian Guy said: ‘Thousands of households have been denied measures that would have reduced bills for households in low income areas. Loft and wall cavity insulation could have helped vulnerable consumers prevent cold homes.
‘With prices up a third since 2010, households are struggling with higher bills to heat and light their homes. Ofgem must make sure energy companies are meeting their obligations to make homes energy efficient. This once again questions whether suppliers are best placed to deliver national energy efficiency programmes and whether a local model would be more effective.’