Energy firm E.ON has been ordered to pay a £3m financial settlement – including a fine of £500,000 – for failing accurately to report how many free energy-saving lightbulbs it had distributed under a flagship government energy scheme.
The regulator Ofgem said the package reflected the “serious” nature of the offence, which was a breach of the company’s reporting obligations under the government’s carbon emissions reduction target (Cert) programme.
The two-tier financial penalty was designed to achieve “balance”, Ofgem said, allowing hard-pressed consumers to benefit rather than the full £3m penalty disappearing into Treasury coffers.
E.ON must pay £2.5m to 18,500 customers in – or at risk of – fuel poverty to help with their 2013/14 winter bills, equivalent to £135 a household.
The remaining £500,000 will be paid as a fine – which would have been much higher had the company not co-operated fully, Ofgem said.
Under Cert legislation, which was in place between 2008 and the end of 2012, the big six energy companies had to introduce measures to help reduce UK carbon emissions in domestic properties. As part of this, suppliers were able to distribute free energy saving light bulbs to British households.
But an Ofgem investigation found that E.ON’s claim to have distributed around 3.4m million light bulbs (of a total of 25 million handed out over the five year period) was inaccurate.
This reported figure included some light bulbs that went on sale in stores in the Republic of Ireland rather than being distributed for free in Britain, as well as others for which E.ON could not provide appropriate evidence that they had been distributed. The total amount reported inaccurately was equivalent to 1% of E.ON’s CERT obligations.