Energy giant SSE gets £100,000 bill as penalty for overcharging

The Big Six energy giant SSE overcharged the taxpayer-owned National Grid for generator subsidies

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The Independent Online

The Big Six energy giant SSE is being forced to pay £100,000 to charity after it overcharged the taxpayer-owned National Grid for generator subsidies. It has now been penalised by more than £12m in two years by the regulator Ofgem.

It’s the latest wrist-slap for FTSE 100-listed SSE, which was fined £1.75m in December for failing to provide free insulation for thousands of poor households, and hit with a record £10.5m penalty in 2013 for mis-selling gas and electricity.

The latest payment – which will go to the charity Energy Action Scotland – came after National Grid, which runs Britain’s energy infrastructure, paid SSE to cut output from six of its Scottish hydro-electric generators, as there was not enough capacity to transmit the electricity.

Ofgem found that last January, SSE asked National Grid if it could reduce generation due to a flood risk, but then maintained that cut for “longer than was necessary”.

“We’ve had concerns about practices in this area and we are actively monitoring generators to ensure they are playing by the rules,” Rachel Fletcher of Ofgem said.

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She said SSE had avoided a larger penalty because of its “admission to its failure, its action to make amends and the small scale of the breach”.

SSE’s chairman, Lord Smith of Kelvin, also bought forward his plans to stand down yesterday: he will now do so in July, after a decade in the role, after being appointed to the same job at the FTSE 250 engineer IMI.

Lord Smith is one of Scotland’s most prominent businessmen and was appointed to oversee the process of devolving more powers to Scotland last year.

SSE’s deputy chairman, Richard Gillingwater, has been lined up to take over as chairman at the company.

“The period of transition that began with Richard’s appointment as deputy chairman at the start of the year is already going very well,” Lord Smith said. “Bringing forward the handover to the AGM makes sense from everyone’s point of view. Over the coming months we will continue to work together on the key operational, market and financial issues facing SSE.”