British Gas is fined £1m by Ofgem

1 July 2011 Last updated at 15:28 GMT The Renewables Obligation scheme requires energy firms to detail their use of renewables Energy regulator Ofgem has fined British Gas ?1m for misreporting how much electricity it supplied.

This affected its target under the government's programme for supplying electricity from renewable sources.

The error was made over seven years by British Gas Business, which supplies the company's business customers.

Ofgem said British Gas Business had underestimated the total amount of electricity it sold by 0.6% a year from 2001-02 to 2008-09.

British Gas said it had brought the error to Ofgem's attention.

'Insufficient procedures'

The misreporting relates to the government's Renewables Obligation programme, which requires energy suppliers to provide evidence of the amount of electricity supplied from renewable sources.

Ofgem administers the scheme on behalf of the government, and the data supplied is used to calculate financial incentives for the energy industry. These are designed to promote the use of renewable energy.

The regulator said British Gas's error was caused by "incorrect interpretation of the reporting requirements, and insufficient procedures by the company".

Kanat Emiroglu, managing director of British Gas Business, said: "We take any failure to meet Ofgem reporting obligations very seriously, and we are sorry this error has occurred.

"As soon as we discovered our misinterpretation of the reporting rules, we acted to bring this to Ofgem's attention, and have worked closely with the regulator to address the problem and to ensure we fully comply with the reporting requirements in the future."

British Gas is owned by parent company Centrica.

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Ofgem to probe energy firm offer

22 June 2011 Last updated at 11:53 GMT Gas prices will be going up by 19% and electricity by 10% Energy watchdog Ofgem has launched an inquiry into a "potentially misleading" offer promoted by Scottish Power after it announced 19% price rises.

The firm had guaranteed prices would remain a minimum of 1% per year below its standard monthly direct debit prices until 30 September, 2012.

But Ofgem insisted the small print did not match up to the promise.

Scottish Power said: "We believe that all figures that have been quoted by us are accurate."

The regulator said it also wanted to press ahead with radical market reforms and force the so-called "big six" energy suppliers to simplify tariffs.

British Gas, Npower, E.ON Energy, EDF Energy, Scottish Power and Scottish and Southern Energy have all signed up to the reform process.

Ofgem said it would be using its consumer protection powers to investigate the promotional offer which was announced by Scottish Power when it revealed it would be putting up prices in August.

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Under the Scottish Power Direct October 2012 Offer, the company guaranteed prices would remain a minimum of 1% per year below its standard monthly direct debit gas and electricity prices until 30 September, 2012.

The watchdog outlined that the investigation would focus on the claim of ?459 savings from the Direct October 2012 offer.

The increases, which will see the cost of gas go up by 19% and the cost of electricity by 10%, will affect some 2.4 million householders in the UK.

Scottish Power had blamed a 30% rise in wholesale gas costs for the increases.

In response to the launch of the inquiry, the utility company said: "We agree that information about all energy tariffs across the market should be as clear as possible and we will fully co-operate with the Ofgem investigation.

"The tariff in question was a very limited offer with considerably discounted prices, which is now fully subscribed.

Alistair Buchanan, the chief executive of Ofgem, says consumers must feel confident that energy companies are "playing straight" with them

"However, there are a number of similar products still available on the market from competitors. We believe that all figures that have been quoted by us are accurate. "

Consumer Focus said it welcomed Ofgem's announcement and added that the utilities market needed to change.

The body's chief executive, Mike O'Connor, said: "The fact that Scottish Power was trying to push a dubious product to cover for their price rise shows just how far the penny needs to drop.

"Energy suppliers have been in denial about their poor reputation, about the health of the market and about the scale of changes needed to put it right. This market needs to change.

"Ofgem has taken another step today and we welcome it."

Meanwhile it was confirmed the six energy suppliers will be questioned by the Scottish Parliament's economy committee next week.

Committee convener and Tory MSP Gavin Brown said he wanted to hear the justification for price rises, adding: "It is important the committee is convinced that the suppliers and the regulator are doing all that they can to minimise the impact of these price rises on low income families and not to prejudice a return to economic growth."

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