Big Six Energy Firm Says Ofgem Needs Reform

By : Business Save |October 07, 2019 |Energy Blog |0 Comment

The energy industry regulator Ofgem has been told that it needs reform by ‘Big Six’ energy provider Scottish Power. The firm also specifically accused the energy watchdog of stalling the electric vehicle rollout.

The accusation was made after Ofgem refused upgrade investments that would help them cope with the demand for electric vehicles.

A ‘Colossal Disconnect’ Between Government and Ofgem Policies

Scottish Power’s Chief Executive, Keith Anderson, said:

“There is a colossal disconnect between government policy and the regulator’s policy. We have a government willing to invest money in electric vehicles ahead of time, and an industry regulator sitting back and saying, ‘No, we don’t think so.’

“But the government has set a 2050 climate target, and a ban on combustion engine vehicles by 2040 which could come forward to 2035. This is going to happen.”

Mr Anderson also said businesses in the sector could do more to help the UK become a carbon neutral economy. He added that some efforts were being held back by Ofgem’s outdated regulation.

This conflict comes after Scottish Power was denied permission by Ofgem to invest £42 million in upgrades. The money was intended to upgrade networks in Scotland and the north-west of England. The energy provider says the investment would have helped them prepare for rising demand for electric vehicles chargers. However, Ofgem doesn’t believe the investment is necessary. They refused permission as Scottish Power would have passed the cost off to their customers.

A spokesperson for Ofgem said:

“If Scottish Power can adequately demonstrate the investment that is needed they may be able to reapply at a later date.”

More Scottish Power and Ofgem Conflict

This latest row is the latest in a long line of issues between Scottish Power and Ofgem. In 2014, Ofgem secured a £2.4 million consumer redress package from Scottish Power for failing to meet environmental obligations on time. Energy suppliers had been told to deliver targets of energy saving measures to help lower carbon emissions and reduce bills. Scottish Power only managed to deliver 70% of its obligation by the deadline, though they fully mitigated the shortfall afterwards.

In 2016, Scottish Power were ordered to pay £18 million, this time for customer service failings. They were discovered to have failed to treat their customers fairly. Issues included call handling, complaint resolution and billing, which were all found to be inadequate.

Dermot Nolan, Ofgem Chief Executive, said of the investigation:

“The £18 million payment sends a strong message to all energy companies about the importance of treating consumers well at all times, including while new systems are put in place.”

It should be noted that Scottish Power’s customer service noticeably improved after Ofgem’s investigation.

Despite the latest row, things had seemed to have smoothed over by 2018. It was then that Ofgem chose Scottish Power to take on the 108,000 customers abandoned by Extra Energy’s collapse.

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