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

30 Jul 2019 01:59 PM

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.

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

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

For media, contact

Michelle Amos: 020 7901 1881

Media out of hours mobile: 07766 511470 (media calls only)

General enquiries (non-media)

If you are an energy customer looking for help and advice, including complaints about energy firms, please see our Household gas and electricity guide. Citizens Advice also provide a free, impartial helpline service across a range of issues on 03454 040506.

We also regularly share news and post general advice to help consumers get the most out of their energy services via our @Ofgem twitter and Facebook pages.

If you have an enquiry or complaint relating to Ofgem’s policies or functions, contact us at consumeraffairs@ofgem.gov.uk or on 020 7901 7295.

For all other non-media related enquiries, please visit our Contact us page.

About Ofgem

Ofgem is the independent energy regulator for Great Britain. Its priority is to make a positive difference for consumers by promoting competition in the energy markets and regulating networks.

For facts, figures and information about Ofgem’s work, see Energy facts and figuresor visit the Ofgem Data Portal.

For energy insights and updates straight to your inbox from Ofgem, please subscribe.