5 July 2011

Ofgem has fined British Gas £1m for Misreporting

The energy regulator Ofgem has fined British Gas for misreporting concerning the Renewables Obligation, make sure you are on the best tariff through MoneyMaxim.

** Energy giant British Gas has been found guilty of supplying inaccurate information about the amount of electricity provided under the governments Renewables Obligation.**

**The misreporting has cost them £1 million as the Renewables Obligation seeks to encourage a more renewable generation.

British Gas would have faced a much higher penalty had it not been for their co-operation and commitment to redress the issue.

The Renewables Obligation requires energy suppliers to provide evidence of the amount of electricity supplied from renewable sources relative to total electricity supplied. Ofgem administers and regulates this scheme on behalf of the Government.

Over the course of 7 years, British Gas has underestimated the amount of electricity it has supplied by an average of 0.62 % per year.

Financial incentives designed to promote the use of renewable energy depend on the accuracy of this information. However, for British Gas this is now unlikely.

Other energy firms have been penalised this year as Ofgem cracks down on misreporting.

David Pimm, Group Finance Director for Ofgem, said: "Ofgem's decision today, and our decision to impose an £8 million penalty on National Grid Gas earlier this year sends a clear message to all energy companies that accurate reporting is essential across the energy sector.”

"Energy suppliers who are presently submitting information to Ofgem for the 2010-11 Renewables Obligation period should also understand that the level of the penalty reflects both the importance of compliance and the significant co-operation of British Gas, including action to address the harm caused. Without this, the penalty would have been much higher.”

Recently one of the leading ‘big six' energy companies Scottish Power announced they are increasing the cost of standard gas by 19 % and electricity by 10 %, adding an extra £175 to annual energy bills. The increased costs will come into affect this autumn.

Other leading energy suppliers such as British Gas are likely to follow suit in the near future.