Utilita Energy has been fined £175,000 after failing to meet its carbon emission reduction obligations.
The company fell short of the requirements under the Energy Company Obligation (ECO) scheme, potentially causing customers to miss out on £30,000 of savings on energy bills.
The penalty will be paid to consumers through the energy redress fund.
ECO is a government energy efficiency scheme, administered by Ofgem, to help reduce carbon emissions and tackle fuel poverty.
Ofgem found that Utilita failed to deliver its obligations for ECO2, the second phase of the scheme which ran from April 2015 to September 2018.
The company missed its overall target to reduce carbon emissions from customers’ homes under the Carbon Emissions Reduction Obligation (CERO) by 2 per cent. It also missed targets for two sub-obligations – to reduce carbon emissions for vulnerable households in rural areas and to insulate homes with solid walls – by 20 per cent and 3 per cent respectively.
Utilita said that its lack of monitoring led to over-delivery against some obligations and the under-delivery against others, leading to non-compliance.
“We are sorry we did not meet our ECO2 obligation. We fully accept the fine and thank Ofgem for its patience and understanding,” said a spokesperson.
“This was simply down to administrative failings that we have subsequently rectified.
“We firmly maintain that we actually over delivered on the required quantity of carbon savings – but some were not recorded in the final total – and Ofgem has acknowledged this.”
Utilita has also agreed to provide more regular updates for the next phase of the scheme, ECO3, and has assured Ofgem it has the processes in place that will effectively manage its delivery.
Ofgem said it will not take formal enforcement action, taking into account the steps Utilita has taken to address its failings and the redress it has agreed to pay.
Commenting on the penalty, Rik Smith, energy expert at uSwitch.com, said: “This fine is a timely reminder that the government’s energy efficiency scheme regulator is willing to hold suppliers to account when they don’t meet their obligations to reduce carbon emissions.
“It’s deeply concerning that vulnerable customers will have missed out on years of warmer, more comfortable homes that are cheaper to heat – as well as losing out on considerable savings because of Utilita’s failure to deliver these carbon reductions.
“This fine should reinforce to suppliers that they need to continue to do right by their customers – or they will be penalised. Energy efficiency will be key to the UK hitting net zero carbon emissions by 2050.”
The firm also agreed to pay £3.61 million back to smart meter customers in 2017 after failing to correctly implement price cuts due to technical issues.