Notice of decision to impose a financial penalty following an investigation into compliance by InterGen with Article 14(1) of the Electricity and Gas (Community Energy Saving Programme) Order 2009

Opened:
Apr 2013
Decision Proposed:
Nov 2014
Closed:
Mar 2015
Company:
Intergen
Regulation Area:
Sectoral Regulations

The Authority has decided to impose a financial penalty on InterGen following an investigation into the company’s compliance with its obligations under Article 14(1) of the Electricity and Gas (Community Energy Saving Programme) Order 2009.

The Community Energy Saving Programme ("CESP") was a policy, set down in legislation, designed to improve domestic energy efficiency standards in the most deprived geographical areas across Great Britain. The relevant legislation was the Electricity and Gas (Community Energy Saving Programme) Order 2009 ("CESP Order"). Under Article 14(1) of the CESP Order, generators and suppliers had to achieve their carbon emissions reduction obligation by promoting qualifying actions to domestic energy users in low income areas.

The Authority found that InterGen breached Article 14(1) of the CESP Order having failed to achieve its carbon emissions reduction obligations by promoting qualifying actions to domestic energy users by 31 December 2012. InterGen failed to meet by 31 December 2012, its carbon emissions reduction obligation mandated under Article 14(1) of the CESP Order. The particular InterGen licensees which failed to meet their obligations were Rocksavage Power Company Ltd, Coryton Energy Company Ltd, and Spalding Energy Company Ltd. InterGen as a whole delivered 6.4% of its obligation and had a shortfall of 489,776 tCO2. InterGen’s shortfall as a percentage of its obligation (93.6%) was greater than any other OP under CESP.

The Authority noted that although InterGen undertook some mitigation activity by May 2013 to mitigate its carbon saving shortfall, InterGen did not mitigate its shortfall in full. InterGen had 203,276 tCO2 (38.8% of its obligation) still undelivered. The Authority had regard to this in setting the level of penalty.

A nominal financial penalty of £1 each will be paid by Rocksavage Power Company Ltd, Coryton Energy Company Ltd and Spalding Energy Company Ltd on the basis that InterGen will pay £11 million (less the £3 financial penalties) in consumer redress. The payments of consumer redress are to be made to:

  • New Gorbals Housing Association (£4.8 million) for the implementation of a gas-powered heating scheme and other measures to over 400 housing units in Glasgow; and
  • National Energy Action (NEA) (£6.2 million) divided between two funds: the Technical Innovation Fund (£3.2million) and the Warm Zones Fund (£3.0 million). These funds will deliver measures to over 1500 households.

The redress payments are to be made at a date to be agreed with the Authority but which shall not be later than 30 April 2015. The financial penalty of £3 is to be paid by 8 May 2015.