CRU sets out penalties for energy firms
The Commission for Regulation of Utilities (CRU) has published a framework setting out how it will calculate financial penalties that it can impose when regulated firms engage in improper conduct.
Under the Electricity Regulation Act 1999, the CRU can impose financial penalties of up to 10% of a regulated energy firm’s turnover, subject to confirmation by the High Court.
The regulator says that the framework strengthens its ability to deter non-compliance and protect the interests of energy customers.
‘Appropriate’ discretion
The CRU says that its approach to setting penalties combines a pre-determined calculation with “an appropriate degree of discretion”.
It adds that this will allow it to take account of the specific circumstances of each case while promoting consistency.
The CRU says that customer harm, vulnerability, and market impacts will be taken into account when assessing penalties, while “timely remediation and compensation” would count as mitigating factors.
The regulator says that this is intended to encourage regulated firms “to address issues promptly and to minimise adverse effects on customers when non‑compliance occurs”.
Trust
Regulated energy entities include electricity and gas suppliers, network operators, and interconnector operators.
Examples of improper conduct could include:
- Inaccurate or misleading information,
- Breaches of customer-protection standards, or
- Other conduct that may directly or indirectly harm customers – particularly vulnerable customers.
Minister for Climate, Energy and the Environment Darragh O’Brien welcomed the framework, saying that it would help to safeguard households and foster trust in regulated energy markets.