British Gas has been ordered to pay out £11.1 million to vulnerable customers by the energy regulator Ofgem after failing to meet Government targets under two energy saving schemes.
The energy giant only hit 62.4% of its target under the Community Energy Savings Programme (CESP) on time. This scheme was designed to provide energy saving measures for low income households during the winter of 2012/13.
Ofgem said this meant 6,750 households didn’t receive energy-saving measures in time for the winter months.
And British Gas also failed to hit its target on time for the Carbon Emissions Reduction Target (CERT), which also was designed to deliver energy efficiency improvements to households. It hit 99% of its target by the deadline but took a further seven weeks to actually achieve 100%.
Too little, too late
It did eventually over-deliver on both schemes following high-profile advertising campaigns in 2013. However, it didn’t hit the target for the CESP scheme until months after the deadline.
[SPOTLIGHT]Ofgem said the level of redress reflects both the fact that it was particularly late in reaching the CESP target but that it settled during the investigation.
British Gas will pay £10.6 million for its CESP failure and £500,000 for missing the CERT deadline.
British Gas and Ofgem are currently deciding how to deliver the redress to vulnerable people.
Management failure
Ofgem said the investigation found that senior management at British Gas didn’t do enough to react to problems with delivery of its obligations in 2012.
Sarah Harrison, Ofgem’s senior partner with responsibility for enforcement, said: “Thousands of households had to wait for energy efficiency measures, like insulation, to be installed during the winter.
“The payment reflects British Gas’ failure to meet its obligations on time but also recognises its commitment to put things right.”
Last week, power companies Drax and InterGen were fined a total of £39 million for their failure to meet targets under the CESP scheme.
The outcome of investigations into why SSE, ScottishPower and GDF/Suez didn’t hit their targets are still to be announced.