1. The Gas and Electricity Markets Authority (‘the Authority’) takes breaches of REMIT very seriously. It is important to ensure that energy consumers and market participants have confidence in the integrity of energy markets, that prices set on the wholesale energy markets reflect a fair and competitive interplay between supply and demand and that no profits can be drawn from market abuse
2. The Authority is satisfied that SSE Generation Limited of No.1 Forbury Place, 43 Forbury Road, Reading, RG1 3JH incorporated and registered in England and Wales with company number 02310571 (‘SSE’) has breached Article 4 of REMIT.
3. Article 4(1) of REMIT specifies that “market participants shall publicly disclose in an effective and timely manner inside information which they possess in respect of business or facilities which the market participant concerned, or its parent undertaking or related undertaking, owns or controls or for whose operational matters that market participant or undertaking is responsible, either in whole or in part.”.
4. Article 2(1) of REMIT specifies that “‘inside information’ means information of a precise nature which has not been made public, which relates, directly or indirectly, to one or more wholesale energy products and which, if it were made public, would be likely to significantly affect the prices of those wholesale energy products.” and that “information shall be deemed to be of a precise nature if it indicates a set of circumstances which exists or may reasonably be expected to come into existence, or an event which has occurred or may reasonably be expected to do so, and if it is specific enough to enable a conclusion to be drawn as to the possible effect of that set of circumstances or event on the prices of wholesale energy products;”.
5. The Authority found that SSE failed to publish inside information as defined by Article (2)(1) of REMIT in a timely and effective manner. The Authority found that on 22 March 2016, SSE had information that was:
- of a ‘precise’ nature within the meaning Article 2(1) of REMIT which had not been made public; and
- which, if it were made public, would have been likely to significantly affect the prices of wholesale energy products.
6. Mindful of, its enforcement obligations under REMIT including the need to ensure the integrity of the electricity and gas wholesale markets, the Authority considered it appropriate to impose a penalty on SSE. This resulted in a financial penalty of £2,627,000 being imposed on SSE in respect of its contraventions of Article 4(1).
7. In determining the financial penalty, the Authority has taken into account that REMIT was a relatively new obligation at the time of the breach, that guidance on the publication of inside information of this type was limited and that SSE failed to recognise the importance of making an announcement on 22 March 2016. Future failures by companies to publish inside information in an effective and timely manner are likely to result in higher penalties.
8. Recognising that SSE has admitted that it has breached Article 4 of REMIT and has agreed to settle this matter during the early settlement window, the Authority discounted the penalty by 30% in accordance with its REMIT Penalties Statement published on 23rd June 2015 . Accordingly, the Authority considered that it was appropriate to reduce the financial penalty due from SSE in respect of the contraventions of Article 4 to £2,060,000.
Dated: 24 August 2020
Gas and Electricity Markets Authority