Scottish Power, SSE and GDF Suez to pay £4.6m in redress

Ofgem has secured a combined payment of £4.6 million from energy companies Scottish Power, SSE and GDF Suez for failing to meet their energy efficiency targets as set out under the government’s Community Energy Savings Programme (Cesp).

Scottish Power’s payment of £2.4 million reflects that it only delivered 70 per cent of its obligation by the December 2012 deadline, Ofgem said. It however did make up the shortfall by April 2013.

Ofgem required SSE to pay less at £1.75 million as it delivered 90.9 per cent of its obligation on time and met the shortfall by May 2013.

GDF Suez will be paying out £450,000 as they quickly made their shortfall up by March 2013 having only delivered 38.6 per cent of a reduced obligation by the deadline.

This payment secured by Ofgem concludes the investigation it was conducting into the six companies that failed to meet their Cesp targets. The other companies under investigation by Ofgem were generators Drax and Intergen, and supplier British Gas.

EDF Energy and Eon were both found by Ofgem to have met their efficiency targets through the Energy Companies Obligation (ECO).

Drax and Intergen made payments of £28 million and £11 million respectively, while British Gas was also made to pay £11 million.

Ofgem said the payments sent a clear message to the industry that failing to meet energy efficiency targets on time was ‘unacceptable’.

SSE group managing director of Retail, Will Morris said: “Having worked very hard to deliver what was a very challenging and complex scheme, and having successfully delivered over 43,000 measures to over 21,000 homes by 31 December 2012, we are very sorry we did not meet our target in full by the deadline.”

“We have learned from this process and are now working hard to ensure that our current obligations under ECO are delivered on time.”

Scottish Power’s CEO retail and generation, Neil Clitheroe said: “By the end of 2012 we had managed to contract for 100 per cent of the obligation but had only physically delivered 70 per cent of our target. The shortfall was delivered by the end of April 2013, and we then continued to deliver measures in excess of our obligation. When completed, our Cesp scheme benefited approximately 20,000 families.

“Although we are disappointed with Ofgem’s enforcement decision, we fully co-operated with the investigation and agreed to settle the matter as quickly as possible.”

Ofgem said payments announced today would go towards helping the vulnerable customers the Cesp scheme was designed to help through payments to several charities.

The Cesp scheme was designed 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 by both energy suppliers and generators.