Ofgem environmental compliance worse among Big Six than new entrants

OVO Energy has failed to comply with its environmental and social programme obligations on 38 occasions, according to an Ofgem report published today (21 September), making it the least compliant provider.

The report looks at suppliers’ performance with regard to seven schemes aimed at tackling energy poverty and reducing carbon emissions which they must fund and promote among their customers. These include the provision of new boilers, roof and wall insulation and the Warm Home Discount for low-income households.

The Big Six energy suppliers were among the worst offenders, according to the regulator, with new entrants – OVO aside – performing better.

Ofgem’s compliance data is significant because it shows clearly who is doing the least and the most to meet social and environmental obligations, a cost which rose by around 10-15 per cent during the past year. This in turn has squeezed utility profit margins at the same time as competition from new entrants  – who do not have to bear these extra costs – has increased.

Ofgem said it had decided to publish the data to make transparent the working of £6 billion of government schemes and ensure they are seen to be promoting consumer interest. Non-compliance can drive up the cost of the schemes which can be passed on to consumers through energy bills, Ofgem said.

Companies which show consistent under performance in this area will face further, unspecified action, Ofgem said.

The seven schemes assessed were: Feed-in Tariffs; Energy Company Obligation; Warm Home Discount; Renewables Obligation; Government Electricity Rebate; Offtake of Last Resort; and Fuel Mix Disclosure.

Ofgem’s report includes only suppliers who have had a non-compliance incident recorded and shows the top 20 worst offenders. Larger companies must participate in all seven schemes, while some smaller suppliers have volunteered to participate in certain schemes.

OVO had 38 incidents recorded compared to an average of less than 10 for other new entrants. However, OVO was ranked second for customer satisfaction in Moneysupermarket.com’s April poll of 1,400 energy consumers.

Npower was second behind OVO as the least compliant energy supplier. Of the other major suppliers, EDF Energy performed best, with 12 incidents of non-compliance recorded, less than half Npower’s incidences. British Gas, E.ON, Scottish Power and SSE were all markedly less compliant than new entrants.

Ofgem counts each incident of non-compliance and splits them into two categories: legislative and administrative. Legislative incidents are direct non-compliance with scheme requirements set in legislation, for example missing a legislative deadline. Administrative non-compliance incidents cover failure to follow guidance.

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