Electricity firm must pay out £100,000

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THE parent company of energy provider Southern Electric has paid out £100,000 after it overcharged fees at its power stations.

Scottish and Southern Energy (SSE), which has a large base in Penner Road, Havant, received a penalty from energy watchdog, Ofgem.

It came after the firm received excessive payments from National Grid, which runs the UK’s electricity network.

National Grid pays compensation to energy generators when demand is lower and the electricity is not needed – a process known as a constraint payments.

But National Grid paid out money to SSE when it should not have done, an inquiry by Ofgem found.

Last January SSE reduced electricity generation at six of its Scottish hydro-electric power stations due to a flood risk at the dams.

However, SSE maintained this lower output for longer than necessary, with the National Grid paying it constraint payments during that period of time.

Rachel Fletcher, Ofgem’s senior partner for markets, said: ‘Ofgem’s rules to stop generators from overcharging ensure that consumers pay no more than they need to for a reliable energy supply.’

Since 2012 Ofgem has had powers to take action against generators for such breaches.

Ms Fletcher added: ‘Given SSE’s admission to its failure, its action to make amends and the small scale of the breach, Ofgem believes the £100,000 payment is the right level of penalty and will not take further action in this case.’

SSE, which serves more than 4m homes, will pay the money to anti-fuel poverty campaign group Energy Action Scotland.