Ofgem launched the investigation into Utilita to determine whether it broke rules around charging customers above the permitted level of the price cap for prepayment meter customers, between May and September 2019.

The Prepayment Meter Price Cap came into force on 1 April 2017. The cap is temporary and applies to prepayment meter customers on a non-fixed deal and without an interoperable smart meter. Suppliers can price to the level of the cap or below it, but cannot charge more.

Ofgem’s issue of a notice of failure to Gnergy Ltd is because the company failed to comply with a final order requiring it to pay £673,876.62 plus interest to the Renewables Obligation buy-out fund.

Ofgem has said it will take strong enforcement action against suppliers that undermine the Renewables Obligation schemes.

Under the government’s Renewables Obligation schemes, suppliers have to demonstrate they have sourced enough electricity from renewable sources to meet their obligation by presenting Renewables Obligation Certificates (ROCs) to Ofgem by 1 September.

If suppliers do not have enough ROCs to meet their obligations, they must make up the shortfall by paying into a buy-out fund administered by Ofgem by 31 August.

If payments haven’t been made by 31 August, suppliers have a late payment window until 31 October to meet their obligation, inclusive of interest charged during this period.

Ofgem issued Gnergy Ltd with a final order on 29 October 2019, requiring the supplier to make an outstanding payment of £673,876.62 plus interest by 31 October 2019 to comply with the Renewables Obligation schemes.

Gnergy Ltd was unable to give Ofgem any assurance it would meet its obligation. It failed to make any payments by the deadline and has not paid the outstanding amount since. Ofgem is now taking further enforcement action by starting the process that may result in the revocation of the supplier’s licence.