Ofgem has today secured a payment of £1.75 million from SSE as it failed to meet its environmental obligation on time under the government’s Community Energy Saving Programme (CESP).
Under CESP, energy suppliers and generators were obligated 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 the installation of energy efficiency measures. However SSE failed to meet its targets on time, delivering 90.9% of its requirements. This was equivalent to 2,100 households missing out on energy efficiency measures.
Ofgem found that SSE’s management had inadequate plans in place to ensure that SSE would deliver its obligations on time. For example, the supplier was slow to increase its budget when it was alerted to the discrepancy between their forecast and actual cost of delivery. SSE did not put measures in place to meet its full obligations by the deadline. Instead it made a decision to deliver the remaining CESP measures after the deadline.
SSE installed energy efficiency measures equivalent to the volume of its CESP shortfall by May 2013. Moreover, it over-delivered which saw around 346 more homes receiving energy efficiency measures than required. SSE’s co-operation enabled a quicker resolution to the investigation and without this the level of penalty would have been higher.
In recognition of its failure, SSE has agreed to pay £1.75 million to benefit vulnerable consumers through the Foundations Independent Living Trust, Energy Action Scotland and to the Citizen’s Advice Bureau for use in Wales.
Sarah Harrison, Ofgem’s 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 targeted to energy customers who need it most.”