SSE accepts 10.5m pound penalty for breach of licence conditions

Energy group SSE confirmed Wednesday that it will be accepting a penalty levied by Ofgem in relation to the breach of two standard licence conditions for UK domestic energy sales.

The £10.5m penalty relates to sales mainly between October 2009 and July 2011.

"SSE is deeply regretful that breaches occurred and apologises unreservedly to any customers who have been affected by sales activity which ran counter to the values and culture of the company," the group said in a statement.

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It stressed that it has "taken important lessons on board" and has "transformed" its approach to sales to ensure it meets the required standards.

The breaches relate mainly to inadequate monitoring, auditing and execution of SSE's past sales activities.

The company continued: "SSE believes it worked hard and in good faith to implement changes to licence conditions made by Ofgem in 2009 and 2010 designed to ensure sales were conducted in a fairer and more transparent manner. Nevertheless, it accepts unreservedly that it did not move fast or far enough in some areas and acknowledges readily that some of its processes were not as effective as they should have been.

"The management of SSE has always sought to ensure high standards of compliance across the business and, as a result of its review of energy sales, took action to reinforce compliance within, and of, the Retail business."

As a result of Ofgem's investigation, three SSE Executive Directors received no payment in 2012 in respect of the corporate performance criterion of the company's annual incentive scheme.

Adding his comment, William Morris, Managing Director of Retail, said: "It has been clear to me from my first day at the company that everyone at SSE is deeply regretful of the way in which we failed to manage and monitor some sales activities, particularly between 2009 and 2011, when, unacceptably, standards slipped below the high levels all customers should be able to expect.

"During the period in question we worked hard to offer competitive prices and carve out an industry-leading position on customer service. We did not, however, spend enough time monitoring our sales processes. That meant we did not always sell in the right way, and we let some customers down.

"When I joined SSE, it was clear that efforts to put things right were well under way. Existing and potential customers can rest assured that we now have the systems, procedures, staff, training and auditing in place to ensure that they will not be let down again."