E.On faces £3 million bill for lost CFLs

Energy company E.On is facing a £3 million bill after admitting that thousands of compact fluorescent lamps that it was supposed to send out for free to UK households were actually sold in Ireland, while others may never have been distributed at all.

An investigation by energy regulator Ofgem found that the figure of 3.4 million CFLs which E.On said it had distributed was inaccurate, and that the figure ‘included some light bulbs which went on sale in stores in the Republic of Ireland rather than being distributed for free in Britain’. For other bulbs, E.On ‘could not provide appropriate evidence that they had actually been distributed’.

The company will pay a £500,000 fine to Ofgem and will make payments of £2.5 million ‘to directly benefit some of its most vulnerable customers’.

Under the government’s CERT (Carbon Emissions Reduction Target) scheme, large energy suppliers like E.On were required to deliver energy-efficiency measures to consumers in Britain, and as part of this many of them sent out free CFL lamps to UK households. The scheme ended last year and was replaced by the Green Deal.

Ofgem said that the total amount reported inaccurately was equivalent to one per cent of E.On’s total CERT obligations.

E.On’s £2.5 million payment will mean around 18,500 extra customers will receive £135 to help with their bills this winter. The payments come on top of E.On’s existing obligations under the scheme.

The £500,000 fine ‘reflects the serious nature of inaccurate reporting’, Ofgem said, adding that the amount would have been much higher if E.On had not engaged so constructively with the investigation.

Sarah Harrison, Ofgem’s senior partner in charge of enforcement, said: ‘This case leaves companies in no doubt that Ofgem takes reporting failures seriously. Accurate company reporting is essential to Ofgem’s effective administration of the Government’s environmental schemes.’

The investigation found that E.On did not have adequate management systems in place to ensure accurate reporting of the distributed lamps. However it also said the company ‘took action to ensure it met its overall CERT obligations by installing extra energy-saving measures to make up for the carbon savings shortfall associated with the light bulbs for whose distribution it had wrongly claimed’.

E.On UK’s chief executive Tony Cocker (pictured) 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.’

The company also emphasised that it has met all its energy-efficiency obligations and that ‘no consumers were misled because of this mistake’.