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Utilities under pressure: SSE and Thames Water pay the penalty after regulatory investigations

Energy supplier SSE PLC has agreed to pay £1mln to Ofgem’s consumer redress fund after providing some pre-payment meter customers with inaccurate and misleading information in annual statements
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Meanwhile, Thames Water has agreed to pay £65mln back to customers as part of a package of payments and penalties worth £120mln

Two UK utiltiies have struck deals with regulators following investigations into poor practice at the groups.

Energy supplier SSE plc (LON:SSE) has agreed to pay £1mln to Ofgem’s consumer redress fund after providing some pre-payment meter (PPM) customers with inaccurate and misleading information in annual statements.

READ: SSE expects challenging year ahead as it merges UK energy supply arm with npower

Ofgem launched an investigation into the FTSE 100 listed firm in November last year after SSE reported the issue to the regulator.:

The investigation found that, between June 2014 and September 2015, the supplier sent out 1.15mln such annual statements to 580,000 pre-payment meter customers.

The probe found that due to an IT coding error, these annual statements had inaccurate information on the alternative cheaper tariff available to customers and inaccurate estimates of how much they could save annually by switching to them.

The investigation concluded that SSE failed to act promptly to put things right, by not identifying the issue at an early stage and by not escalating action to address it or putting in place appropriate remedial actions.

SSE said it has since improved its processes to prevent this from happening again, which includes carrying out extra checks on their customer communications before issuing them and giving more resources to the teams involved.

It added that Ofgem has now closed this case without taking formal enforcement action.

Thames Water to return £120mln to customers

Meanwhile, in another regulatory ruling, Thames Water - which is owned by Kemble Water Holdings, a consortium of institutional investors - has today agreed to pay £65mln back to customers as part of a package of payments and penalties worth £120mln.

This follows an Ofwat investigation which found that Thames Water's board did not have sufficient oversight and control of the company's leakage performance.

The £65mln payment to customers is on top of £55mln in automatic penalties incurred by the company for missing the commitment it made to customers to cut leaks.

This means that Thames' shareholders will return a total of £120mln to customers, as a result, each Thames customer will get a total rebate of approximately £15 over the next two years.

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