Utilita Energy to pay £175,000 after failing to meet carbon emission reduction obligations

Publication date
30th July 2019
Information types
Policy areas
  • Utilita Energy failed to meet carbon emission reduction obligations
  • Customers could have missed out on £30,000 of savings on energy bills as a result
  • Utilita Energy will pay £175,000 to the energy redress fund and commits to providing more regular updates on progress in meeting its obligations

Utilita Energy failed to meet its carbon reduction obligations under the Energy Company Obligation (ECO) scheme between 2015 and 2018 and will pay £175,000 to the energy redress fund over its failings.

ECO is a government energy efficiency scheme in Great Britain, administered by Ofgem, to help reduce carbon emissions and tackle fuel poverty. 

The scheme promotes energy efficiency measures to help fuel poor and vulnerable households heat their homes and cut bills, for example by replacing a broken heating system or upgrading an inefficient heating system.

Ofgem found that Utilita Energy failed to deliver its obligations for ECO2, the second phase of the scheme which ran from April 2015 to September 2018. 

It missed its overall target to reduce carbon emissions from customers’ homes (the Carbon Emissions Reduction Obligation or CERO) by 2%. It also missed targets for two sub-obligations – to reduce carbon emissions for vulnerable households in rural areas and to insulate homes with solid walls – by 20% and 3% respectively. 

As a result of not delivering these carbon savings, consumers, some of whom might have been vulnerable, could have missed out on savings of £30,000 on energy bills. 

Utilita Energy said that its lack of monitoring led to over-delivery against some obligations and the under-delivery against others, leading to non-compliance. 

For its failings, Utilita Energy has volunteered to provide more regular updates for the next phase of the scheme, ECO3 and has assured Ofgem it has the processes in place that will effectively manage its delivery.

Utilita Energy has also agreed to pay £175,000 to consumers via the energy redress fund.

Ofgem has decided not to take formal enforcement action, taking into account the steps Utilita Energy has taken to address its failings and the redress it has agreed to pay.

Notes to editors 

  • Utilita was found to have fallen short on one obligation (CERO) and two sub-obligations (CERO Rural and Provisional Solid Wall Minimum Requirement (PSWMR). CERO Rural is focussed towards vulnerable individuals living in rural areas of Great Britain. 
  • The ECO2 Order requires obligated suppliers to deliver Cost and Carbon Savings via the delivery of energy efficiency measures to meet their CERO and Home Heating Cost Reduction Obligations (HHCRO) and associated sub-obligations. Suppliers of a certain size are obligated to deliver energy efficiency measures to domestic households to meet targets set by BEIS.
  • The ECO Order states that a supplier must achieve its total carbon emissions reduction obligation [CERO] by no later than 30 September 2018.
  • A supplier must also meet its CERO Rural and PSWMR sub-obligations in order to meet its CERO obligation.
  • ECO2 ran from April 2015 to September 2018. Ofgem delivered a report to the Secretary of State at the end of March 2019 detailing how the obligated energy suppliers had performed with respect to their obligations.
  • More information on the ECO scheme can be found on the ECO section of the Ofgem website
  • For more information about Ofgem’s voluntary redress fund, see: Ofgem appoints Energy Saving Trust to distribute payments from rule-breaking energy companies to charities

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