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Energy companies fined £36 million


Power generation companies, Drax and InterGen, have both been fined £36 million after failing to meet energy saving targets for low income households.

Drax, which is based in North Yorkshire, was hit with a £28 million fine, and InterGen an £11 million fine. The regulator, Ofgem, hit the companies with the penalties after they failed to meet targets to insulate homes under the Community Energy Saving Programme (CESP), which was part of the governments Home Energy Saving Programme. The CESP was designed to help reduce bills for many thousands of customers living in low income areas by helping them with loft and wall insulation, and new boilers.

Ofgem have announced that Drax missed its targets by a clear margin, disadvantaging several thousand households in some of the most deprived areas in Britain. Sarah Harrison, senior partner in charge of enforcement at Ofgem, said:

"Not only are these consumers missing out on energy efficiency measures that would help keep their homes warm, they also face higher energy bills as a result. Today's agreement to pay £28m reflects the seriousness of the consequences of these failings for consumers."

Dorothy Thompson, chief Executive of Drax, said:

"We are deeply disappointed with the magnitude of the fine. However, we believe it is in our shareholders' interests to settle this matter and, as the nation's single largest power provider, focus on delivering a reliable supply of electricity this winter.

"We are pleased to be working with National Energy Action to develop a package of measures which would benefit vulnerable energy consumers."
The regulator is still deliberating over the need to fine the bigger energy companies including British Gas, SSE and Scottish Power. The decision is due to be made in the next few weeks.

Ofgem will invest the money from the penalties into energy saving schemes and customer redress programmes.

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