Of the package, £1 million will be donated to support the Energy Best Deal public awareness campaign run by Citizen’s Advice, aimed at helping domestic energy customers to shop around, reduce their bills and get help if they are falling behind with energy payments. £3.5 million will be used to further reduce the bills of EDF Energy customers at risk of fuel poverty (who are eligible to receive pension credit and the Warm Home Discount).
Ofgem said it could have imposed a penalty, but customers were “better served” by EDF Energy making payments to benefit customers most in need. It said the size of the payment reflected “EDF Energy’s approach in recognising the mistakes that led to the breaches taking place, the way it proactively corrected these errors, and the firm’s agreement to pay a £4.5 million package to help vulnerable consumers.”
Ofgem does not have statutory powers to seek collective redress on behalf of consumers, unlike other regulators such as FSA and Ofcom. The Department of Energy and Climate Change has confirmed that it is looking into the possibility of giving Ofgem new powers to order redress as an alternative to imposing a penalty in cases where this may be appropriate. This would increase Ofgem’s powers to get redress for consumers in cases where it cannot reach a settlement with an energy company.
Ofgem is still investigating Scottish Power, SSE, and Npower, but added, “For the avoidance of doubt, the fact that Ofgem continues these investigations should not be taken as implying that any supplier has breached its obligations”.