Ofgem firm on upholding rigorous company standards on behalf of energy customers

Press release

Publication date


Industry sector

Supply and Retail Market

Today (Thursday 7 July 2022), energy regulator Ofgem has published a Notice of Proposal to make a Final Order against energy supplier UK Energy Incubator Hub Ltd (UKEIH). The proposed Final Order would require UKEIH to remove a senior individual from a position of significant management responsibility or influence with the company on the basis that the individual is not fit and proper to occupy such a role.   

UKEIH is a domestic energy supplier, serving approximately 3,000 customers, and operating under two brands, Northumbria Energy and Neo Energy.   

This is the first time that Ofgem has proposed to use its new rules, introduced at the start of last year, requiring energy bosses to be ‘fit and proper’ for the job.* Ofgem’s concerns centre around a number of serious, persistent and recent compliance failings, such as a failure to provide basic information about the company when asked by Ofgem and poor customer service. These breaches have been the subject of three separate Provisional Orders so far this year. 

There will now be a consultation period of 21 days, after which time the Enforcement Decision Panel will decide whether to make the Final Order. No findings about regulatory contraventions by UKEIH relating to the new rules have been made at this stage. 

As part of its robust compliance process, Ofgem also earlier this week (Wednesday 6 July 2022) issued a Provisional Order to supplier Foxglove Energy Supply Ltd for its apparent failure to meet the Financial Responsibility Principle. This means Foxglove must now take swift action to improve its financial position. Until it does so, Foxglove must refrain from taking on new customers and cannot take any money from the business unless it is essential to its operation.   

Cathryn Scott, Ofgem Director of Enforcement and Emerging Issues, said:        

“Ofgem’s role is to protect consumers and we are raising the bar and taking firm action against suppliers to ensure they are fit and proper and have robust and sound financials. This is our role as a robust regulator and is what customers expect and deserve. Our tightened-up rules will help protect bill-payers during these very difficult times.” 

Shortly, Ofgem will also set out its initial findings of a ‘market compliance review’ into how energy companies handle customer direct debits.

Notes to editors

UK ENERGY INCUBATOR HUB LTD overview - Find and update company information - GOV.UK (company-information.service.gov.uk) 

UK ENERGY INCUBATOR HUB LTD filing history - Find and update company information - GOV.UK (company-information.service.gov.uk)

* Fit and proper requirement  

This is the first proposal to make a Final Order under the ongoing fit and proper requirement introduced by Ofgem in 2021. Standard Licence Condition (SLC) 4C.1 of the gas and electricity supply licenses prohibits a licensed supplier from appointing or having in post a person with Significant Managerial Responsibility or Influence who is not a fit and proper person to occupy such a role.  

A Final Order requires a regulated person to do, or not to do, such things as are specified in the order, for example, cease certain behaviour that Ofgem considers is in breach of relevant conditions or requirements, or to take certain steps to ensure compliance with the relevant conditions or requirements.  

Before it can make a Final Order, Ofgem needs to be satisfied that a regulated person is contravening or is likely to contravene any relevant condition or requirement. In such circumstances, Ofgem can by a Final Order make such provision as is requisite for the purpose of securing compliance with that condition or requirement. 

Before making a Final Order, Ofgem must publish a Notice of Proposal to make a Final Order and consult for 21 days, after which its Enforcement Decision Panel will take account of any representations made in deciding whether to make the Final Order. 

The Enforcement Decision Panel 

The Enforcement Decision Panel (‘EDP’) consists of employees of Ofgem specifically employed for EDP duties. The duty of a decision-making Panel is to consider relevant matters referred to it and to take decisions concerning (amongst other things) the making of a Final Order.  

The Financial Responsibility Principle  

The Financial Responsibility Principle (Standard Licence Condition 4B) requires suppliers at all times to manage responsibly costs that could be mutualised (i.e. shared across consumers), to take appropriate action to minimise such costs, and at all times to have adequate financial arrangements in place to meet their costs at risk of being mutualised. 

See Ofgem's previous final orders (FO) to suppliers: Compliance and enforcement - Investigations, orders and penalties.