Energy supplier SSE has been fined more than £2m by the industry watchdog for failing to announce inside information that could have influenced the price of wholesale electricity.
Companies are required to publish such information in an “effective and timely” manner, said energy regulator Ofgem.
The fine can be traced back to a deal SSE struck in March 2016 with National Grid to provide electricity from the company’s Fiddler’s Ferry power station.
SSE had previously said that it intended to shut the power station in April 2016. The site supplies as much as 3pc of the UK’s energy demand at peak times.
The deal between SSE and National Grid made it more likely that the power station would remain open. This announcement was “likely to have a significant effect on wholesale prices, and was therefore inside information”, Ofgem said.
But SSE did not disclose the deal, or the fact that Fiddler’s Ferry power station was likely to remain open, for another eight days.
It is likely this led to some market participants paying more for wholesale electricity than they should have, Ofgem said.
Jonathan Brearley, chief executive at Ofgem, said: “SSE’s failure to publish inside information in a timely and effective manner resulted in market participants trading for four working days under a false impression of supply availability in Britain’s electricity market.
“This fine sends a strong message to market participants that they must be familiar with, and keep to, their obligations under Remit [Regulation on Wholesale Energy Market Integrity and Transparency] rules or face enforcement action by Ofgem.”
By settling the investigation early, Ofgem said, SSE qualified for a 30pc discount on the total fine of £2.6m. It is the first fine of its kind meted out by the watchdog.
Future failures to publish inside information in the correct timeframe are likely to result in even higher penalties, the regulator added.
Martin Pibworth of SSE said: “SSE takes its market disclosures extremely seriously and acted in good faith... We subsequently understood that Ofgem’s interpretation required disclosure to the market at an earlier stage. We admit that our approach was not in line with this requirement.
“SSE did not benefit from disclosing only once the contract was signed and remains committed to clear and transparent rules for all market participants. We will be pressing regulatory authorities for additional guidance for market participants going forward.”