Investigation into British Gas’ compliance with its obligations under the electricity supply licence (Standard Licence Condition 12)

Opened:
Sep 2014
Decision Proposed:
Dec 2016
Closed:
Jan 2017
Company:
British Gas
Regulation Area:
Sectoral Regulations

The Gas and Electricity Markets Authority ("the Authority") has decided to impose a financial penalty on British Gas Trading Limited ("British Gas") following an investigation by Ofgem into its failure to comply with Standard Licence Condition 12 of the Electricity Supply Licence, in relation to advanced meters for non-domestic premises.

Under SLC 12.18 licensees must not install an electricity meter, other than an advanced meter, at relevant premises after 6 April 2009. Under SLC 12.21 licensees must not, from 6 April 2014, supply electricity to any relevant premises other than through an advanced meter. SLC 12.22 states that the prohibition in SLC 12.21 does not apply where the licensee is unable to install or arrange for the installation of any advanced meter at the relevant premises in question despite taking all reasonable steps to do so (for the purposes of SLC 12, ‘relevant premises’ are defined as Non-Domestic Premises where the metering point falls within profile class 5, 6, 7, or 8 as defined by the Balancing and Settlement Code).

The Authority found that British Gas installed electricity meters at a number of relevant premises after the regulatory deadline (6 April 2009) that were not advanced meters, in breach of SLC 12.18. The Authority also found that British Gas was in breach of SLC 12.21 as at 6 April 2014. The Authority found that British Gas failed to take all reasonable steps to install or arrange for the installation of advanced meters at all relevant premises as at 6 April 2014. The Authority was of the view that around 10,000 additional meter points at relevant premises would have been supplied through an advanced meter had British Gas taken all reasonable steps to install or arrange for the installation of advanced meters at those premises.

The Authority considered it appropriate to impose a penalty for this contravention. The penalty of £1 takes into account the fact that British Gas agreed to settle the investigation and to make consumer redress payments of £4.5m (minus £1) to the Carbon Trust. These monies are to be used to help businesses across Great Britain save energy via energy saving audits and advice, and the installation of energy efficiency measures.

Furthermore, British Gas agreed to increased levels of monitoring of the meter points at relevant premises which have not yet been installed with an advanced meter.