OFGEM, the U.K. regulator for the electricity and gas markets in Great Britain announced Friday a GBP1 million penalty on Centrica Plc’s British Gas Business after the regulator’s investigation found that the company had misreported the amount of electricity supplied under the government’s renewables obligation.
The error was caused by British Gas’s incorrect interpretation of the reporting requirements and insufficient procedures by the company.
The renewables obligation requires energy suppliers to provide evidence of the amount of electricity supplied from renewable sources relative to total electricity supplied.
Financial incentives designed to promote the use of renewable energy depend on the accuracy of this information.
Ofgem administers this scheme on behalf of the government.
Over a period of seven years, British Gas underestimated the amount of electricity supplied by an average of 0.62% per year.
British Gas brought the error to Ofgem’s attention and co-operated fully throughout the investigation.
It is taking action to address the market impact caused by the error by retiring an appropriate number of renewable obligation certificates or ROCs in the current compliance period.
Ofgem has decided to impose a financial penalty of GBP1 million on British Gas.
This has been significantly reduced because of British Gas’ approach and action.
