British Gas forced to pay £11m to charity after energy efficiency failure which left thousands without insulation in winter
- Energy giant fined over £11m by Ofgem over delays to energy efficiency
- Fine going to charity helping vulnerable customers with energy needs
- Thousands of low-income households left without new insulation
- British Gas blames poor weather for the delays
British Gas is being forced to give £11.1million to charity as part of a punishment by the energy regulator for failing to deliver household efficiency measures on time.
The energy giant managed to deliver only 60 per cent of its Community Energy Saving Programme, which was designed to help vulnerable households by installing free insulation, by the deadline at the end of 2012.
Ofgem said British Gas failed to take appropriate action to ensure the efficiency targets were met, even after problems began to surface in 2012.
Running late: British Gas will pay £11.1million to charity after being punished by Ofgem for failing to deliver energy efficiency measures on time in 2012
Over 6,700 low-income households experienced delays in receiving the energy saving measures, leaving them without insulation throughout the winter months. British Gas said one of the factors behind the delays was bad weather.
The regulator's £11million penalty to British Gas also covers the company's failure to deliver its obligation under the Carbon Emissions Reduction target, which requires firms to achieve targets for reducing carbon emissions within domestic properties. The energy giant fared better under this scheme, meeting 99 per cent of its obligations.
The money will go to benefit vulnerable homes through specialist energy poverty charities. Ofgem denied that the level of the fine meant that it was cheaper for British Gas to pay up rather than meet its obligations.
Ofgem's Sarah Harrison said: 'British Gas's failure to deliver two environmental obligations on time is unacceptable. Thousands of households had to wait for energy efficiency measures like insulation to be installed during the winter.
'The payment reflects British Gas's failure to meet its obligations on time but also recognises its commitment to put things right'.
After the failings, British Gas said it delivered more measures than required, insulated millions of homes and added an additional £110million savings on energy bills.
Claire Mills of British Gas said: 'We're hugely committed to the success of our energy efficiency programmes and are sorry we missed the 2012 deadline.
'However, we're pleased that in the end we managed to help more vulnerable people under this scheme than was required. The donation we're making will further help those struggling to keep their homes warm'.
Caught out: As part of Ofgem's investigation into failures relating to energy saving measures, power station Drax was fined a record £28million last week for failing to meet its obligations
British Gas is not the only firm to have its failings under energy saving schemes exposed. Last week, Ofgem issued power station Drax with a record penalty of £28million, while InterGen was ordered to pay £11million for its failings under the schemes.
Failing customers
Earlier this year, Ofgem wrote to the big six and a number of smaller independent suppliers condemning an 'industry-wide failure' to handle customer complaints quickly and effectively.
The regulator accused energy companies of being 'frankly awful' at handling customer complaints.
Failing customers: Ofgem condemned energy firms for being 'frankly awful' at handling customer complaints
As many as 57 per cent of households and 52 per cent of small businesses that complained were not satisfied with how the supplier handled their problem.
Startlingly, in almost half of cases where the supplier considered the case resolved, the customer did not.
Ofgem told companies to speed up their complaints resolution, improve communication with customers while problems are being resolved and be more proactive in finding a solution.
Satisfaction with Npower and Scottish Power had fallen particularly markedly, from 36 per cent to 21 per cent and from 44 per cent to 20 per cent respectively.
Only SSE managed to maintain levels of satisfaction found two years ago.
Ofgem chief executive Dermot Nolan said: 'These satisfaction scores are frankly awful.
'Almost all energy suppliers need to improve their complaints handling as a matter of urgency. There are real business benefits to good complaints handling schemes, and it shouldn't need a regulator to tell companies about the importance of this.
'Suppliers must now tell their customers what steps they will be taking to put things right. We are already formally investigating Npower about complaints handling and other customer service issues, and this should send a strong signal to all suppliers that, where necessary, we will take action.'
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