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Energy companies paid out almost £49 million in penalties and redress in 2019/20, more than the previous three years combined, Ofgem’s Enforcement Decision Panel (EDP) has revealed.
In its sixth annual report the panel said the 26 cases that were referred to it over the period represented a “significant increase”. Overall the number of cases overseen by the EDP in 2019/20 were the same amount seen over the previous five years.
The EDP takes enforcement decisions on behalf of the Gas and Electricity Markets Authority (GEMA).
Companies that are found to have breached licence conditions can pay into the voluntary consumer redress fund which allocates the money to various charities, or face a financial penalty which is paid to the treasury.
*The panel noted that this latest reporting year was 15 as opposed to 12 months.
In total, six companies paid £48.9 million in penalties and redress for various failings.
InterGen
Power generator InterGen paid £37.2 million in total, more than any other company. In April last year Ofgem revealed that the company had been manipulating the market for commercial gain in winter 2016.
Ovo
Ovo paid £8.8 million in redress after admitting systems and compliance failings that resulted in the majority of its customers receiving inaccurate or incomplete information. This led to multiple instances of customers being incorrectly billed.
Engie Global Markets (EGM)
Engie Global Markets was fined £2.1 million by Ofgem after one its traders was found to have engaged in “spoofing” to manipulate wholesale gas prices and increase profits over a three-month period between June and August 2016.
Spoofing refers to the practice of placing bids or offers with no intention of executing them.
Economy Energy, E (Gas and Electricity) and Dyball Associates
Ofgem found energy suppliers Economy Energy and E (Gas and Electricity), along with consultancy firm Dyball Associates to have breached competition law.
The three companies were fined £870,000 collectively by the regulator after they infringed chapter one of the Competition Act 1998.
In addition, Ofgem issued 22 provisional orders against suppliers for various breaches of their licence conditions.
These ranged from failures to meet renewables obligation (RO) and feed-in-tariff (FIT) payments, to failing to become a Data Communications Company (DCC) user.
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