Ofgem said earlier this year that it would be cracking down on various behaviours it had identified among some generators. Credit: Andrew Aitchison/Contributor/Corbis Historical via Getty Images.

The electricity regulator Ofgem has proposed that electricity generator EPSHB pay a £23.63m ($28.75m) fine for breaching its licence, causing unfair price hikes for consumers. 

An investigation found that between 2019 and 2021, EPSHB submitted excessive bid prices at times when the National Grid’s Electricity System Operator (ESO) needed to lower its output, in breach of its Transmission Constraint Licence Condition (TCLC). As a result, the ESO faced increased costs to balance the system, which were later reflected on consumer energy bills. 

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This is the third time this year that Ofgem has fined an electricity generator for a licence breach. In January, Drax Pumped Storage paid £6.12m, and in July, SSE Generation faced a £9.78m penalty. However, the fine proposed for EPSHB is markedly higher, which Ofgem says “reflects the scale of the excessive payments secured by EPSHB and the extended period of the breach”. 

The proposed fine will be paid to Ofgem’s Energy Redress Fund, which provides support to energy charities and projects supporting people at risk of fuel poverty or struggling with rising energy costs. 

In a press release, Cathryn Scott, director of Enforcement and Emerging Issues at Ofgem said:  

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“Protecting consumers is a priority for Ofgem, and we will continue to monitor the wholesale energy markets in Great Britain and ensure their integrity on behalf of energy users.   

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“This latest enforcement action sends another strong signal to all generators that they must put in place controls to ensure that their bid prices are set in a way that ensures that they do not obtain excessive benefits during transmission constraint periods.  

“If they fail to do so, licensees should expect to face large penalties, particularly in light of the repeated warnings which have been given regarding our expectations of generators in respect of the TCLC.”