British Gas penalty to pay for energy savings

British Gas Business is to fund the installation of £3.45 million worth of energy efficiency measures in small firms, as penalty for stopping companies switching supplier

Regulator Ofgem has ordered British Gas Business to pay out £5.6 million, after investigations revealed that the energy company incorrectly stopped some of its business customers from moving to another supplier and that it failed to notify others their contracts were coming to an end.

According to Ofgem, during 2007-2012 a computer error and “inadequate” checking processes resulted in British Gas Business refusing to allow some of its non-domestic customers to change their energy provider. The computer glitch meant that 5.6% of the objections made by British Gas Business were invalid.

The firm rectified the problem in 2012, soon after Ofgem began investigating the issue, but was ordered this week to pay an £800,000 penalty and £3.2 million into an energy efficiency fund that will provide measures, such as insulation and new boilers, to micro-business customers.

A separate investigation, found that the energy supplier had also failed to notify 1,200 of its non-domestic customers, the majority of which were micro-businesses, that their tariff was about to expire. This meant that the firms, unaware they were able to look for a better deal, either continued on the same terms or were rolled over onto standard tariff rates, which were more expensive.

British Gas Business has paid back close to £1.3 million in compensation to current customers which were affected and is attempting to pay a further £150,000 to those which have moved suppliers. Ofgem has also ordered the company to pay an additional £250,000 into the energy efficiency fund.