SSE Repays £100,000 On Overcharging

SSE has repaid £100,000 after the energy watchdog found that the company overcharged fees at six of its power stations.

Ofgem said it levied the penalty because SSE, which serves around four and a half million households, received excessive constraint payments from the UK's energy network operator National Grid.

These payments are brought into force by National Grid at times of high or low demand in the system. At these times the National Grid pays generators additional fees to increase or cut their supply.

Last January SSE reduced generation at six of its Scottish hydro-electric power stations due to a flood risk at the dams. However, SSE maintained this level for longer than necessary, with the National Grid paying it higher fees during the period.

This led to National Grid paying more than it should have to reduce generation from the stations. Since 2012 Ofgem has had powers to take action against generators in this area.

Rachel Fletcher, Ofgem's senior partner for markets, said: Ofgem's rules to stop generators from overcharging ensure that consumers pay no more than they need to for a reliable energy supply.''

She added: Given SSE's admission to its failure, its action to make amends and the small scale of the breach, Ofgem believes the £100,000 payment is the right level of penalty and will not take further action in this case.''

SSE, which also trades as Scottish Hydro, Southern Electric, SWALEC and Atlantic, will pay the money to anti-fuel poverty campaign group Energy Action Scotland.

Separately, SSE chairman Lord Smith of Kelvin has brought forward the date he will step down from the energy firm to its annual meeting on July 23.

He will become chairman of FTSE 250 engineering group IMI at its annual meeting on May 7.

Lord Smith had been due to step down from the board of SSE on January 1 next year after 13 years at the power company. He will be replaced by SSE deputy chairman Richard Gillingwater at the July meeting. Mr Gillingwater joined the SSE board in 2007 and became deputy chairman in January.

Lord Smith said: The period of transition that began with Richard's appointment as deputy chairman at the start of the year is already going very well and bringing forward the handover to the annual general meeting makes sense from everyone's point of view.''

Lord Smith has previously been a chairman of engineering firm Weir Group and has served on the boards of 3i, Bank of Scotland and Network Rail.