Centrica slides on British Gas’ £5.6m penalty
CENTRICA’S share price slumped over one per cent yesterday, after its supply arm British Gas was fined £5.6m by the regulator for unfairly blocking business customers from switching.
Energy firms can prevent customers from switching in certain cases, such as if the customer owes money on the account. But Ofgem found that between 2007 and 2012, British Gas’s business unit had used its blocking power unfairly 5.6 per cent of the time.
In a separate probe, Ofgem found that British Gas failed to give notice to around 1,200 business customers that their tariff was about to expire, meaning they did not have a chance to shop around for better deals. “The ability for consumers to switch easily and fairly is key to a well-functioning energy market,” said Sarah Harrison, Ofgem senior partner in charge of enforcement.
British Gas has already paid nearly £1.3m to compensate customers and will now pay a further £3.45m into an energy efficiency fund, which will provide energy-saving measures such as insulation and new boilers. It will also pay a £800,000 penalty.
“[We] have worked swiftly to change our computer systems and processes… to stop this happening again,” said Stephen Beynon, managing director of British Gas Business.
An Ofgem spokesperson told CityAM that no other energy firms are under investigation for similar misdemeanours. FTSE 100-quoted Centrica closed down 1.16 per cent.