Monday 4 July 2011

British Gas fined £1m

British Gas Business has been fined £1m by regulator Ofgem after misreporting the amount of electricity supplied under the Government's Renewables Obligation. Ofgem have said the error was caused by British Gas' "incorrect interpretation of the reporting requirements."

Over a period of seven years, British Gas has underestimated the amount of electricity supplied by an average of 0.62% per year. British Gas did bring the error to Ofgem's attention which the regulator says has reduced the fine imposed on the company substantially.

Ofgem is taking action to address the market impact caused by the error by retiring an appropriate number of Renewable Obligation Certificates, around 87,000 which is estimated to be equivalent to the value to other market participants of around £2.8m.

David Pimm, Group Finance Director, Ofgem, said: "Energy suppliers who are presently submitting information to Ofgem for the 2010-11 Renewables Obligation period should also understand that the level of the penalty reflects both the importance of compliance and the significant co-operation of British Gas, including action to address the harm caused. Without this, the penalty would have been much higher."