£1M fine for British Gas mistake
British Gas has been fined £1million after it was ruled the company had lied about the amount of renewable energy it was using.
An Ofgem investigation found British Gas has not provided accurate information in Renewable obligation Certificates (ROCs), which is aimed at forcing big business to buy more of its energy from green sources.
Over a period of seven years, according to Ofgem, British Gas underestimated the amount of electricity supplied by an average of 0.62% a year.
British Gas brought the error to Ofgem's attention and is retiring 87,000 ROCs with an estimated value to other market participants of around £2.8million, to readdress the mistake.
According to Ofgem it would also have imposed a larger penalty had it not been for British Gas' 'co-operation and commitment' in admitting the mistakes which had happened for seven years.
Back in 2005 the government passed 'The Renewable Obligation Order 2005' making energy companies source a percentage of their energy provided to customers from renewable sources.
Under the rules energy suppliers are legally required to provide evidence of the amount of electricity supplied from renewable sources relative to total electricity supplied.
Ofgem group finance director, David Pimm, said: "Ofgem's decision, 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 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."