E.ON to pay out £3m over lightbulb scandal

The UK's energy regulator has ordered energy company E.ON to pay out a total of £3m after it was found to have misreported the number of free energy saving lightbulbs it had distributed.

The company will have to pay a £500,000 fine to Ofgem, and will pay an additional £2.5m towards the Warm Home Discount Scheme for 2013/14, which will give around 18,500 eligible customers an extra £135 to help with their winter fuel bills.

Under the government's carbon emissions reduction target (CERT) programme, large energy suppliers were required to deliver energy efficiency measures, with suppliers able to distribute free energy saving lightbulbs to British households to meet requirements. E.ON reported it had distributed 3.4m such lichtbulbs. a figure found to be inaccurate. The total amount reported inaccurately was equivalent to around one per cent of its total CERT obligations.

Sarah Harrison, Ofgem’s senior partner in charge of enforcement, said:

This settlement means that £2.5 million of additional help will go to some of E.ON’s most vulnerable customers. The settlement reflects E.ON’s cooperation with Ofgem’s investigation, as well as the company’s willingness to make up its shortfall for the CERT scheme. Without E.ON’s constructive engagement, the level of fine would have been much higher.

Tony Cocker, chief executive of E.ON UK, said:

We're sorry that these mistakes were made in 2010 and Ofgem has received a Board level assurance that the necessary changes have been made. Our controls should have been stronger and our processes more robust.

It was important to us that, as part of putting this right, customers in fuel poverty or in a fuel poverty at risk group should receive a portion of the penalty we faced in the form of the additional payments we are making. We're pleased that Ofgem agreed and has allowed us to do so.

Overall energy efficiency obligations have been met, with the shortfall being made up by additional measures. No consumers were misled because of this mistake but this does not take away from the fact it was an error that should not have been made.